Purchase Solution

Define Estates and Trusts: why create one?

Not what you're looking for?

Ask Custom Question

Estates and Trusts: Define the terms and give examples to demonstrate situations where the creation of a trust might accomplish trustor objectives. Briefly explain taxation concepts of the income generated in a trust. Compare a trust to an estate.

Purchase this Solution
Solution Summary

The solution provides a decent explanation of what a trust is, how it is created including definition of terms. Included is a list of eight reasons why a trust might be created plus a list of six types of trusts. The list is not all-inclusive but presented to show the wide diversity of types of trusts.

Solution Preview

First, three definitions of terms

Grantor (trustor): the person who sets up and transfers property to a trust
Trustee: the person (or entity) who will administer the trust
Beneficiary: the person(s) who will receive the property in the trust

A trust is an arrangement in which property is transferred by the grantor to a trustee, to be held and managed by the trustee for the benefit of the people called beneficiaries. The types and terms of trusts are varied and often complex, but the legal formation allows for great flexibility in the creation of a trust. ...

Purchase this Solution
Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Operations Management

This quiz tests a student's knowledge about Operations Management

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

View More Free Quizzes
Related BrainMass Solutions

  • Income from Flow-through Entities

    Finally, Dominique will report a gain of $3,900 ($6,000*.65) and Terrell will report a gain of $2,100 ($6,000*.35) on the line labeled "Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1" in Part II

  • Normal Costing vs. Actual Costing Systems and One Pool vs. Multi-Pool Allocation

    Actual Costing Systems and One Pool vs. Multi-Pool Allocation Case Hammond and Jarrett provide tax consulting for estates and trusts.

  • Resilience in American Higher Education

    559328 Resilience in American Higher Education Large-scale philanthropic contributors, who offered substantial gifts such as foundations, trusts, and estates, were necessary to higher education budgets in order to pay for salaries, services, and the construction

  • Comparative Benefits of an LLC

    S corporation: An S corporation can have no more than 100 shareholders; they must be domestic individuals, estates, certain exempt organizations, or certain trusts; there can be only one class of stock; and there can be no special allocations.

  • Calculation of Gift Tax. In 2010, Sondra makes taxable gifts

    Estates and trusts do not literally have AGI, but Sec. 67(e) provides that a hypothetical AGI amount for an estate or trust is determined in the same fashion as for an individual except that (1) expenses paid or incurred in connection with the administration

  • S Corporation restrictions/Investment Income

    The category might also include annuities, royalties and certain income items flowing out of a partnership, S-corp or estates or trusts, depending on character and source.

  • Accounting education, experience and responsibilities

    The economy has its ups and downs, but, as some say, the only things certain in life are "death and taxes." Every legal, taxable, entity pays taxes--individuals, corporations, partnerships, estates and trusts.

  • Valuation to be Recorded for Noncash Assets Transfer

    To qualify as a Subchapter S Corporation, a company can only have one class of stock and must have no more than 75 owners. These owners can only be individuals, estates, certain tax-exempt entities, and certain types of trusts.

  • Cost Accounting: How to change the single overhead pool cost allocation

    33405 Cost Accounting: How to change the single overhead pool cost allocation Art and Bert provide tax consulting for estates and trusts.

View More Related Solutions