It depends, if it is set up as a simple trust, or a complex trust. A simple trust requires an income distribution to its beneficiaries.
A complex trust doesn't require a mandatory income distribution to beneficiaries, unlike a simple trust. In a complex trust:
- The trustee can keep money in the trust, give only part of it, or even give out the whole amount if the trust terms let it.
- Complex trusts can accumulate income, which is then taxed at the trust's tax rate—a consideration that may impact decisions on distribution.
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