Preservation | Family Wealth Protection & Planning

A trustee is responsible for administering a trust for the benefit of the beneficiary or beneficiaries. Unless the beneficiary is also a trustee, he or she will not have direct access to information regarding the investments, debts, liabilities, expenses, receipts and other financial arrangements of the trust. Without a mechanism for learning this information, the beneficiary might worry that assets will run out, the trustee might misuse funds, or another problem will occur. Therefore, Missouri law, and the law of those states that have adopted similar provisions from the Uniform Trust Code (UTC), provides that a trustee must provide specific information and an annual report to certain beneficiaries so their interests may be protected.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for April 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for April 2018:

Similar to individuals, trusts normally pay federal and state income taxes. In 2018, the highest federal rate of 37 percent only applies to single individuals if they have more than $500,000 of income and to married couples filing jointly if they have more than $600,000 of income. However, a trust will be in the highest federal tax bracket if it has more than $12,500 of income. (The maximum long-term capital gains and qualified dividends rate is now 20 percent for trusts with more than $12,700 of income.)