Domestic Trust as a Specified Domestic Entity | Trust Tax Lawyer Manhattan
If the ‘Specified Individual‘ is a current beneficiary of the trust then the trust is considered a ‘Specified Domestic Entity’. What it means is that any type of a US Beneficiary will make the trust a Specified Domestic Entity by definition; it’s very easy for a ‘Specified Trust’ to be a Specified Domestic Entity.
Now what does it mean ‘Current Beneficiary’? It basically means that the beneficiary either receives a distribution or is entitled to a distribution, even if the distribution is never made, even if the distribution is in the discretion of the trustees. So in essence any type of Complex or Simple trust, it doesn’t really matter, as long as there is a US beneficiary.
Is everyone familiar with a ‘Complex Trust’ vs ‘Simple Trust? A Simple Trust is where basically all of the income of the trust is required to be distributed on an annual basis to the beneficiary and the Complex Trust is a situation where there is a discretion or an impart of income that is a requirement of the distribution to the beneficiary.
