Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 07-13-2009, 05:16 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,397
Blog Entries: 3
What are the various types of Trusts Funds?

There are generally only 2 types of trust funds available. These are a Simple Trust and a Complex Trust.

What is a Simple Trust?
A Simple Trust is a trust that must pay out all accounting income earned in the year.

What are the main features of a Simple Trust?
Simple trusts cannot pay out principle, they must be changed to a complex trust to do that. This is why these types of trust funds are popular to give to kids or grandkids, it allows cash flow, but will not dwindle the source. Also, 2 types of beneficiaries are set-up, remainder and income beneficiaries. If the accounting income has not already been cleared, it must all be paid out at the end of the year to "income beneficiaries". The principle is preserved for the remainder beneficiaries. Simple trusts cannot have any charitable beneficiaries.

What is a Complex Trust?
A Complex trust is a Trust that can pay out dividends to its beneficiaries, or it can simply accumulate the accounting income. Generally speaking, Complex trusts are known to offer greater flexibility and versatility to it beneficiaries with respect to its distribution of assets."

What are the main features of a Complex Trust?
1. The Complex trust has the option whether or not to pay out the accounting income.

2. The Complex Trust has the option whether or not to pay out the Principle of the Trust (or the Corpus).

3. The Complex trusts have the option to utilize charitable beneficiaries.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What are the different types of whole life policies available for purchase? Dwhite Life Insurance 3 05-19-2011 04:34 AM
How many types of Stafford Loans are available? TaxGuru Education Planning 0 06-11-2009 11:32 PM
What types of homes would qualify for First-Time Homebuyer Credit? TaxGuru Homeowner Tax 0 01-29-2009 01:57 AM
Trusts cannot fully deduct amounts paid for investment advice. TaxGuru Trusts and Gift Tax Returns 0 07-25-2008 04:09 PM
IRS shortens the filing extension period given to partnerships, estates, and trusts. TaxGuru For 2008 0 07-22-2008 12:17 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning