Is inherited "In Trust For" money taxable?

[QuestionsTT]

My mother died in March 2024.  I have three siblings.  Mother lived in New Hampshire. 

Mom left money in an "in trust for" account at her local bank.  My eldest brother was named as the sole trustee. 

My eldest brother moved the money to his bank (he lives in Colorado) and is dividing the money equally between us three other siblings.  I live in Oregon. 

Questions: 

1. Does my brother have to pay taxes on the "in trust for" money when he moved it from the NH bank to his Colorado bank? 
2. Will I have to pay taxes when I take my share of that money from him? 
3. The amount exceeds the gift tax limit.  When I take my share of the money, will it count as a "gift" since I wasn't a trustee on the original account? 

Thanks

[JamesG1]

What direction do you receive from your brother, the trustee, or the legal counsel that may be assisting your brother?

Income generated after the income was placed in trust may be subject to tax and the tax may have been paid by the trust.  Or the expectation may be that the beneficiaries will pay tax on the income generated.

If you have received no tax forms or you have received no direction, you may want to contact them to ease your mind.

[ThomasM125 · Accepted solution]

Your brother does not have to pay tax on the money when it is moved. You won't have to pay federal or New Hampshire tax on the money since an inheritance is not taxable. If your brother was named as the sole heir to the money, then the payment to you would involve gift taxes, otherwise if you inherited your share, then there would be no gift tax issues as the money would not be a gift. 

A gift is taxable to the giver, so your brother would be the only one potentially subject to a gift tax. There is a federal lifetime exemption of 13.61 million dollars for gifts in 2024, so it is not likely there would be any gift tax involved. 

[MarilynG1]

1. Your brother may not have to pay tax on the funds moved from the trust; however, the trust will most likely report the movement. It also depends on whether the original funds were from a fund like an IRA, or whether it was 'after tax' money. 

2.  No, if your brother gives you cash from his bank account, yes, it would be a gift.  He reports the gift, not you, if it exceeds 18K.

3.  Since he reports the gift, you don't have to do anything.

Here's more info on Gift Taxes.

@QuestionsTT