The Form 1041 instructions delineate the differences rather succinctly but one of the primary differences is that a complex trust can usually distribute capital gains to the beneficiary(ies), which otherwise belong to the corpus of the trust and remain within the trust.
See https://www.irs.gov/instructions/i1041#idm140376226642960
A couple of things to bear in mind include:
1) The trustee (or administrator) does not get to choose "simple" or "complex"; that is contained in the trust document.
2) In the final year of the trust, the trust is automatically complex (since it will be distributing corpus and terminating).
The Form 1041 instructions delineate the differences rather succinctly but one of the primary differences is that a complex trust can usually distribute capital gains to the beneficiary(ies), which otherwise belong to the corpus of the trust and remain within the trust.
See https://www.irs.gov/instructions/i1041#idm140376226642960
A couple of things to bear in mind include:
1) The trustee (or administrator) does not get to choose "simple" or "complex"; that is contained in the trust document.
2) In the final year of the trust, the trust is automatically complex (since it will be distributing corpus and terminating).