Scenario: Client who was the grantor of revocable trust dies. His annuity had the revocable trust as the beneficiary. Now the trust is irrevocable since he passed. The annuity settlement option to the trust is lump sum or stretch for 5 years.

Question: With a lump sum, should taxes be held when distributing to the trust? At the end of the day, the trust says to distribute the assets equally to the client’s 2 adult sons. Want to make sure we do right by the trust beneficiaries. I don’t want to w/h from distirbution to the trust and then the adult sons get taxed also once those assets are distributed to them.