Wasting Trust

Wasting Trust

1. A trust in which the principal does not generate sufficient income to meet desired payouts and therefore the beneficiary receives a portion of the principal each month. Obviously, this reduces the future income potential of the remaining principal. A wasting trust only occurs if further contributions (which increase the principal) are not made.

2. A trust that holds assets that dissipate over time, such as contracts on corn and gas.
References in periodicals archive ?
Each company was making a final contribution to what is known as a "wasting trust,'' which would have enough money to pay everyone's pensions for the rest of their lives.
The IRS then indicated, although not in writing, that it would not continue to press its argument that a sponsorless wasting trust was not a qualified plan.
The IRS indicated, again not in writing, that a second ruling would soon be published describing the procedures to follow with reference to sponsorless wasting trusts. That ruling was under development some years ago, but has yet to be issued.