Beneficiaries of a trust typically pay taxes on the distributions they receive from the trust's income, rather than the trust itself paying the tax. However, such beneficiaries are not subject to taxes on distributions from the trust's principal.
An issue that frequently arises is the treatment of an inheritance received by a spouse during the marriage. The basic rule is that any property received via gift or inheritance during the marriage is exempt from equitable distribution.
With nearly half of all marriages ending in divorce, it’s not uncommon to have clients who are either going through divorce proceedings, living as a single parent after a divorce, or have been married more than once–with or without stepchildren.