Legal Question in Tax Law in California
K-1s and Trusts
Are trustees required to turn in K-1s every year? How are the benificiaries to do their taxes when one isnt turned in. If told not receiving one because we are receiving previosly taxed income, how do we know she is not paying out other money and not showing it. confused, please explain how the K1's are to be used and are to benifit a benificiary.
1 Answer from Attorneys
Re: K-1s and Trusts
Yes, normally trust tax returns must be filed each year by the trustee and k-1's must be provided to all beneficiaries each year.
If you do not receive a k-1 or are not receiving a regular trust accounting, you may need to file a petition with the probate court to compel an accounting (and possibly for removal of the trustee). Although you may have an action for recovery from a trustee of improperly used or distributed funds, by that time the funds or assets may be dissipated or hidden. If the trustee personally has no assets, you may have in effect no real recourse available.
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