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You state it is an Attorney's trust account, so there is no separate Trust and there would not be a 1041 prepared for it. Attorneys, in the course of their regular business operations, maintain "pooled" trust accounts at banks, and can need to establish a segregated one for a specific matter (client issue). The interest from the segregated account would be reported to that client; pooled trust account earnings go to IOLTA (common trust maintained, such as, by the State or Bar Association). Neither activity results in a trust. Are you sure this is a Trust, or a Trust Account?
You state it is an Attorney's trust account, so there is no separate Trust and there would not be a 1041 prepared for it. Attorneys, in the course of their regular business operations, maintain "pooled" trust accounts at banks, and can need to establish a segregated one for a specific matter (client issue). The interest from the segregated account would be reported to that client; pooled trust account earnings go to IOLTA (common trust maintained, such as, by the State or Bar Association). Neither activity results in a trust. Are you sure this is a Trust, or a Trust Account?
So, obviously I do not do many trust/1041 returns. After a couple of questions, thank you for pointing me in the right direction, This is an irrevocable trust for litigation purposes. So, it is a complex trust. I am getting a copy of the trust agreement. If you think I should be aware of something else, it is appreciated.
"This is an irrevocable trust for litigation purposes."
It's no problem. You always need to know the details. The terminology doesn't always describe the facts. That's why I asked.
I already explained how attorneys have Trust Accounts.
Let's take the example of a potentially large settlement, or a large set of plaintiffs. There can be a Trust that got established because of the large number of beneficiaries for once the trust is funded with the settlement amount, such as physical harm and/or environmental damage.
In which case,you will likely find the Attorney is the Trustee = the person named to manage everything. That means it is not the Attorney's trust account; the account belongs to the Trust. It's not even the Attorney's Trust. The point of forming this as a separate entity is because of the need to provide some protection to the parties involved, perhaps for a number of years after litigation, as well. The Attorney will operate and manage the Trust for the beneficiaries. The Trust is its own entity.
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