Accumulation Trust


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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 ?
Such a trust may be structured as a "conduit trust," which passes minimum required distributions to the beneficiary, or a purely discretionary "accumulation trust."
Asset protection of retirement funds after Clark: Supreme Court decision denies exclusion of an inherited IRA from a bankruptcy estate
89-89 and 2006-26 have approved this method as meeting the definition of "entitled to." 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.
Leaving retirement benefits to trusts: pitfalls for the unwary
Further, with respect to multiple trusts, Congress has already given the necessary weapons to combat the multiple trust "evil" in 1976 by the enactment of heavy penalties levied on distributions from more than two accumulation trusts to the same beneficiary for any taxable year [IRC Sec.
Tax rate compression and estate income tax planning
(20) This applies to a accumulation trusts created after Feb.
Does the TRA '97 offer true relief?
Under the throwback rules, severe penalties are levied on beneficiaries of multiple accumulation trusts. A penalty is imposed when a beneficiary receives an accumulation distribution from more than two trusts with respect to the same prior tax year, subject to a $1,000 de minimis rule.(92) The "gross up" for taxes paid by the trust is not permitted.
643(f),(94) under regulations to be prescribed by the Treasury, two or more trusts that are not accumulation trusts will be treated as one trust for income tax purposes if: 1.
Income tax planning for trust and estate distributions
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