Tax Elections Clause

What is it?

A tax elections clause grants the trustee authority to make various tax-related decisions on behalf of the trust, including choosing fiscal year, allocation of income and deductions, and elections that affect how the trust and beneficiaries are taxed.

Why is it important?

Tax elections can significantly impact the overall tax burden on the trust and beneficiaries. Giving the trustee flexibility to make these decisions allows for tax-efficient administration as laws change and circumstances evolve.

Example Language

The Trustee shall have full authority to make all tax elections available under federal, state, and local law, including but not limited to elections regarding fiscal year, allocation of receipts and disbursements between income and principal, and any elections available under the Internal Revenue Code.