Trusts

A trust is a type of tax entity. A trust is created by an individual person to protect or to preserve the person’s assets, and to distribute income to beneficiaries. A trust may take effect during the person’s life, or might take effect upon the person’s death. A trust is managed by a trustee. The trustee is responsible for all aspects of the trust. The trust is a separate entity for tax purposes from the person who created the trust. The trust reports its own income and tax on a specific and separate IRS Form. The trust also reports income distributed to beneficiaries using Form K-1.