“Thought for the Day” #689 – by Stephen R. Elville, J.D., LL.M.

March 21, 2016

Many people are intimidated and confused by the seemingly daunting task of understanding the taxation of trusts and estates. While this area of taxation is complex, one aspect of trust taxation is simpler to understand and is a foundational concept in estate planning – the grantor trust. This is simply a trust where the grantor of the trust pays the income tax of the trust by reporting such income on his or her own IRS Form 1040. A revocable trust is an example of a grantor trust.