Accumulation Trust


Also found in: Legal.

Accumulation Trust

A trust into which the grantor places assets under the direction of a trustee. Unlike other trusts, the trustee is not allowed to give the assets themselves to the beneficiary. Rather, the trustee invests the assets and delivers the gains to the beneficiary.
References in periodicals archive ?
However, if an accumulation trust is used, this method will deplete the plan benefits if the spouse lives to his or her life expectancy, leaving nothing for the remainder beneficiaries.
Because the spouse is entitled to only the income from the plan and the marital deduction rules do not require the spouse to receive the entire RMD if it exceeds the plan's income, the trustee of an accumulation trust may withdraw from the retirement plan the greater of the RMD or the income from the plan and pass to the spouse only the plan's income.
Patricia Mock, director of private client services at Deloitte, said: "Historically, transfers into interest in possession trusts and accumulation trusts have been potentially exempt for inheritance tax and are exempt if the donor survives for seven years after the gift.
Under the throwback rules, severe penalties are levied on beneficiaries of multiple accumulation trusts.