Ordinarily, a foreign partnership, Foreign simple trust
, or foreign grantor trust is looked through for chapter 3 and chapter 61 purposes.
Finally, it will be taxed as a simple trust
, which makes it much easier to file and report the trust's income.
Utilizing a simple trust
, such as the Lifetime Credit Shelter Trust, provides more flexibility - one does not have to replace the asset in trust with an asset of equal value if the property is sold.
It begins with simple trust
, for sure, but it seems to demand more than that.
At first glance these new vehicles may seem a good idea but, realistically, I have to question the value of these schemes over placing money on behalf of the child in a simple trust
Stash away some money in a simple trust
called a "bare" trust, which is held for the child's benefit.
However, there are good reasons for having a simple trust
arrangement, protecting assets against nursing home fees, the re-marriage of the surviving spouse or divorce, bankruptcy etc of children/grandchildren.
A simple trust
within the will would ensure that property is passed to the children which keeps the family assets within the family.
A simple trust
must distribute all current income; thus all income taxes apply at the beneficiary level, and it does not have any undistributed net investment income.
Palin is just one example but is equally a victim of the simple trust
model used by many web applications.
It might be worthwhile setting up a simple trust
thatwill make clear that the shares are not your personal property, and that you are just looking after the investments until each child reaches 18.
For example, a simple trust
might direct the trustee to distribute all income to the grantor's spouse and at the spouse's death distribute the principal to the grantor's children.