trust expense issue

[joanmcq]

Client is executrix of mother's estate. Mother had a living trust; assets consisted of stocks, mutual funds, cash, bare land and a rental unit. Client recieved 20k in a prior year as executrix fee (reported on 1099), but also paid about 50k out of pocket in funeral expenses, upkeep and repairs on the rental, attorney fees etc. Beneficiaries were client and sister. Sister did not like how long it was taking to settle estate (sale of rental fell out of escrow), resulting in client having to pay 200k to sister, in return for the rental as well as having to pay sister's attorney fees. Client never received reimbursement for the expenses she paid out of pocket. Yes, client's attorney appears not to have done much for client during suit. Sister is raving lunatic.

Questions: Are the client's attorney fees deductible? I think so since it was to gain clear title to the rental. What about the sister's attorney fees paid by the client?

Are the unreimbursed expenses deductible by the trust? If so, are they split 50/50 per K-1 as if they were paid by the trust or can they be allocated 100% to client? If not by the trust (since they were trust expenses) can the client deduct as misc expenses?

Did the trust close as of the date of the settlement? Client has not paid 200k yet...has to somehow get a loan...and rental hasn't been retitled. Settlement date was in Oct 2008.

Client is getting reamed since payout is based on approx value of rental property on DOD..which was 2004 and property has and is losing value.