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13 Facts About Trusts

Here are some more foundational facts about the Copyrighted Spendthrift Trust.

For much more detail and a deeper info dive please either see our FAQ or set an appointment at the link below:

What Is The Trust?

13 Facts to Know...




  1. A Settlor has no rights or beneficial interest in the Trust.

  2. The Compliance Overseer can be the trustee (as long as he/she is not the Settlor of the trust).  The Compliance Overseer can appoint another party to be the trustee; however, the Compliance Overseer can still replace the trustee that he/she has appointed.

  3. The Compliance Overseer can appoint or remove any beneficiary at will. A Compliance Overseer may never be a beneficiary.

  4. Beneficiaries in a Spendthrift Trust may be anyone or any organization named in the Trust Documents.

  5. The Compliance Overseer can appoint his/her successor at any time during his lifetime.


  6. The trustee may disburse funds to the beneficiaries in equal amounts, unequal amounts or not at all at his/her absolute discretion.

  7. If a Compliance Overseer does not appoint a successor, then upon his/her death, the office disappears. Yet, the existing appointed trustee and the beneficiaries remain the same.

  8. When the Settlor or anyone else gives money or assets to the trust for it to be capitalized or endowed, no taxable event has occurred.  The trust pays taxes only on what the assets earns unless deemed to be paid to the corpus according to the terms and conditions of the trust, which is discretionary.

  9.  Any monies that the trustee distributes from the original endowment of the trust to the beneficiaries are a nontaxable event for the trust. The monies that the trust earns are taxable unless deemed to be paid to the corpus according to the terms and conditions of the trust.

  10. Once the assets are placed into the trust, no court or entity can remove them.  Spendthrift Trusts have proven to withstand court judgments, divorces, bankruptcies and lawsuits.  These trusts have been successful in preventing creditors from attaching trust assets.

  11. Trusts can own and trade government securities, stocks, and bonds, gold precious metals or any other form of asset.  The trust can hold, buy or sell real estate.

  12. The monies that are paid to the beneficiaries are a taxable event to the beneficiary from the endowment funds of the trust according to their income level if earned income is the distribution; only the monies that a trust earns from the endowment and are undistributed to the beneficiaries are taxable to the trust if retained by the trust unless deemed to be paid to the corpus according to the terms and conditions of the trust. Master’s Trust Format is a discretionary trust and complies with this IRS regulation.

  13. Trusts are required to file federal income tax returns. Form 1041 is used. However, a Spendthrift Trust is a complex trust and the capitalizations or endowments of the trust are not taxable events and deemed to be paid to the corpus according to the terms and conditions of the trust. Capitalizations or Endowments are retained indefinitely and only distributed by the trustees of the trust to the beneficiaries at the sole and absolute discretion of the trustees only. All capitalizations or endowments of a trust that are retained in the corpus are not a taxable event.


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