Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- May 16, 2005
- Messages
- 17,383
Being a trust officer in a past life, I find it interesting that there is a debate on what is principal and what is not..
It is clearly defined in a trust... I did a search and found this from a 'dummies' website...
What Are a Trust's Principal and Income? - For Dummies
Principal, sometimes referred to as the corpus or body, of the trust, is the property that the trust owns. Although trust principal starts with the assets that originally fund the trust, it may increase or decrease in many situations, including the following:
Now, you might disagree with this, but this has been established by laws and courts....
Let's say that you get a lot of income and do not spend it in that year... under this definition, it does not become principal.... it is still in your income account... your income account balance might grow for many years before it starts to fall... or might never fall at all....
It is clearly defined in a trust... I did a search and found this from a 'dummies' website...
What Are a Trust's Principal and Income? - For Dummies
Principal, sometimes referred to as the corpus or body, of the trust, is the property that the trust owns. Although trust principal starts with the assets that originally fund the trust, it may increase or decrease in many situations, including the following:
- The sale of trust property creates capital gains or losses.
- The grantor makes additional contributions to the trust.
- The trust receives a settlement or judgment as a party in a lawsuit.
- You transfer into principal any accumulated income that’s not required to go to an income beneficiary.
Now, you might disagree with this, but this has been established by laws and courts....
Let's say that you get a lot of income and do not spend it in that year... under this definition, it does not become principal.... it is still in your income account... your income account balance might grow for many years before it starts to fall... or might never fall at all....