What are the legal rights given to all beneficiaries?
Current beneficiaries have the right to distributions as set forth in the trust document. Right to information. Current and remainder beneficiaries have the right to be provided enough information about the trust and its administration to know how to enforce their rights. Right to an accounting.
Who are the beneficiaries of a QSST Trust?
To qualify, a QSST: can have only one income beneficiary, that is, only one person can receive the income generated by the trust (except that spouses can be co-beneficiaries of the income if they are both U.S. citizens or residents and they file a joint federal income tax return)
Can a trust have more than one beneficiary?
Regulations further define that trusts with multiple beneficiaries can meet the QSST “single-beneficiary” requirement as well. Regulation Sec. 1.1361-1 (j) (3), provides each beneficiary must have a separate and independent share of the trust, each of which is treated as a separate trust for federal income tax purposes.
Who is the beneficiary when a trust becomes an ESBT?
If the trust qualifies and becomes an electing QSST, the beneficiary and not the estate is treated as the shareholder as of the effective date of the QSST election. If the trust qualifies and becomes an ESBT, the shareholders are determined under paragraph (E), below, as of the effective date of the ESBT election.
Can a successor income beneficiary revoke a QSST?
A new (successor) income beneficiary does not have to file an election to continue QSST status (however, the new beneficiary may affirmatively refuse to consent to the QSST election, which would invalidate the QSST election and revoke the S election (Regs. Sec. 1.1361-1(j)(9))).
Can a QSST have more than one income beneficiary?
A QSST can have one or more successive income beneficiaries. However, naming one or more successive income beneficiaries risks the company’s S status because each successive income beneficiary is permitted to affirmatively refuse to consent to the original QSST election (Regs. Sec. 1. 1361 – 1 (j) (9)).
What are legal rights does a trust beneficiary have?
Current and remainder beneficiaries have the right to be provided enough information about the trust and its administration to know how to enforce their rights. Right to an accounting. Current beneficiaries are entitled to an accounting. An accounting is a detailed report of all income, expenses, and distributions from the trust.
What happens when a trust ceases to be a QSST?
When this occurs, the trust would cease to be a QSST because it would have more than one current income beneficiary. This would lead to loss of S status for the corporation because a trust with two income beneficiaries is not an eligible shareholder.
Can a trust have more than one income beneficiary?
The trust must have only one income beneficiary during the life of the current income beneficiary, and that beneficiary must be a U.S. citizen or resident; All of the income of the trust must be (or must be required to be) distributed currently to the one income beneficiary;