Complex Trust
Understand complex trusts: what they entail, their unique features, and how they may fit into comprehensive estate planning strategies.
What makes a trust 'complex', and when might it be beneficial?
A trust is typically considered 'complex' if it is required to distribute both principal and income, accumulate income, or distribute capital gains. Complex trusts often have the flexibility of varying distributions to beneficiaries, which makes them beneficial for fulfilling specific financial goals or tax planning strategies. This flexibility can help address unique family situations, such as providing for a special needs dependent or managing business interests. While a 'simple trust' must distribute all income annually, a complex trust provides the trustee with more discretion. Complex trusts are often utilized in estate plans when flexible allocation and preservation of wealth are priorities.
