Quora Answer: Is There Taxation on My Assets in a Trust after My Death?

The following is my answer to a Quora question: “If I put all my assets into a trust, then pass away, will there be an estate tax on those assets?”

Assuming there is an estate or inheritance tax where you are, it would be the responsibility of the trustees to pay the tax.  Trusts are vehicles to mitigate tax liability.  The trustees have to pay the tax upon any disbursements to the beneficiaries.  It is not the beneficiaries’ responsibility to pay that tax.

This is all assuming that your trust is an irrevocable trust.  A revocable trust would likely be folded into your estate unless you have made provisions for it to become a testamentary trust upon your death.  Testamentary trusts are irrevocable.  This makes them distinct legal entities, with distinct tax labilities, that may be mitigated.