sprinkling trust

Sprinkling trust

A trust in which the trustee decides how to distribute trust income among a group of designated people.

Sprinkling Trust

A trust with several beneficiaries in which the trustee has the discretion to distribute funds between them. That is, the trustor gives the trustee a great deal of leeway to use the trust according to the needs of individual beneficiaries. A sprinkling trust may be a living trust or may be part of a will.

sprinkling trust

A family trust in which the trustee has the power to distribute income to the beneficiaries according to their individual needs rather than according to a specified formula.
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The enactment of the Small Business Job Protection Act of 1996 (SBJPA) expanded the maximum number of eligible S shareholders to 75, added new categories of eligible shareholders, allows the IRS to waive inadvertent errors related to the making of an S election, relaxed the 2 1/2-month rule to file Form 2553, Election by a Small Business Corporation (under Section 1362 of the Internal Revenue Code), and allows sprinkling trusts, charities and pension plans to be S shareholders; also, S corporations can now be members of affiliated groups.
Current developments - eligibility, elections and terminations; operations; reorganizations; and legislation

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