What is a grantor trust?

Video Transcription:

There’s a lot of different ways to categorize trusts, because there’s maybe 40 kinds of trusts. One way to categorize is grantor versus non-grantor. Most trusts pay their own income tax, unless there’s a distribution to a beneficiary. Then the beneficiary pays the tax, but grantor trusts are in a category by themselves, and they never pay tax. Instead, whatever income they have, interest, dividends, capital gains, gets taxed to the person who funded the trust. Have more questions? Then contact us today to schedule a free consultation! Doane & Doane – Top rated Tax & Estate Planning Attorneys