Define: Simple Trust

A simple trust is a type of trust that distributes all of its income to the beneficiaries on an annual basis and does not allow for the accumulation of income.

Unlike a complex trust, a simple trust does not have provisions for distributing principal or retaining income. It must distribute all of its income to the beneficiaries each year.

Any individual or entity can create a simple trust, as long as they have the legal capacity to do so.

A simple trust is generally subject to income tax on its earnings, but the income is passed through to the beneficiaries who are responsible for reporting it on their personal tax returns.

In most cases, a simple trust can be modified or revoked by the creator as long as they have the legal capacity to do so and the trust document allows for such changes.

Yes, a simple trust can have multiple beneficiaries who are entitled to receive the income generated by the trust.

Yes, a simple trust can hold various types of assets, including real estate, stocks, bonds, and other investments.

Yes, a simple trust can be used as part of an estate plan to transfer assets to beneficiaries while providing some control over the distribution of income.

If a beneficiary of a simple trust dies, their share of the trust’s income will typically pass to their designated heirs or beneficiaries according to the trust document or applicable laws.

Yes, a simple trust can be used to make charitable donations by designating a charitable organisation as a beneficiary and distributing a portion of the trust’s income to them.