@taxdean wrote:
Are you referring to the hypothetical that I thought you told me to stop addressing? To be clear, the reality is that there was money left for the variable beneficiaries.
I am simply not sure and that is the problem when hypotheticals are interspersed with facts.
Regardless, I am not even certain precisely what you need answered at this point and, frankly, without actually reading the terms of the trust, it is rather difficult, if not impossible, to provide a completely accurate answer.
I will state, as a matter of general principle, that the "fixed beneficiaries" would share in the loss (the final year deductions) unless the trust specified otherwise. The balance would then be split among the other beneficiaries in terms of the loss. Note that there is some math involved here since the fixed beneficiaries will receive a share of the loss up to the amount of the corpus they received based on the total amount distributed to all beneficiaries.
This would be an example (very rough): The three beneficiaries received $150,000 and the remaining two also received $150,000 (presumably this is all corpus). The first three beneficiaries would share equally in half of the loss while the remaining two would share in the other half of the loss.
