What is a Complex Trust?
A Complex Trust is a trust that is not a Grantor or Simple Trust. This would include a testamentary or inter vivos trust (other than a Grantor Trust) for which all income of the trust is not required to be distributed (or is not paid or payable) on a an annual basis). The beneficial owner of the assets of income for a Complex Trust is the Trust itself.
A “complex trust” is a trust that is not defined as a “simple trust” or a “grantor trust” under the Internal Revenue Code. Q: What is a grantor trust? A: “Grantor trust” is a term used in the Internal Revenue Code to describe any trust over which the grantor or other owner retains the power to control or direct the trust’s income or assets. If a grantor retains certain powers over or benefits in a trust, the income of the trust will be taxed to the grantor, rather than to the trust. (Examples, the power to decide who receives income, the power to vote or to direct the vote of the stock held by the trust or to control the investment of the trust funds, the power to revoke the trust, etc.) All “revocable trusts” are by definition grantor trusts. An “irrevocable trust” can be treated as a grantor trust if any of the grantor trust definitions contained in Internal Code ยงยง 671, 673, 674, 675, 676, or 677 are met. If a trust is a grantor trust, then the grantor is treated as the owner of the
