Simple trust is one of three general types of trust that must meet three requirements set by the IRS: all the income must be distributed to the beneficiaries yearly, the trust fund must not payout any of its corpus (better known as principal), and cannot make charitable contributions. The simple trust makes tax payments like other trusts on income and capital gains. A simple trust differs from complex trusts which may involve other payments to beneficiaries and to charities.
[Last updated in August of 2021 by the Wex Definitions Team]