This effectively means that you, as the beneficiary, would be responsible for paying capital-gains tax on any appreciation when you eventually sell the asset, not the trust. “So if the trustee distributed the stock/funds instead of cash, there is a potential tax-rate arbitrage to play depending on the facts,” Pantekidis says. “We go through this with our clients yearly, especially younger beneficiaries that have little to no income.”“If beneficiaries receive trust assets ‘in kind,’ then normally, when a tru ...