Grantor Trusts
Learn about grantor trusts and how they work for estate planning. Discover the tax benefits and control features that make grantor trusts popular with families.
Do I pay taxes on income from my grantor trust?
Yes, as the grantor of a grantor trust, you personally pay income taxes on all trust earnings and income. This happens because you retain certain powers or benefits that make the IRS treat the trust as part of your personal tax situation. The trust itself doesn't file a separate income tax return - instead, all income flows through to your personal return. This tax responsibility actually provides an estate planning benefit because paying the trust's taxes with your personal funds effectively transfers more wealth to your beneficiaries tax-free.
