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Change in beneficiaries of a trust during the year

November 30, 2016 • Josh Levy • Log In to Post Comments

Where the beneficiaries of a trust change during the year, what method should be used to allocate distributed income? i.e Prorated days method, or Interim Closing of trust books, etc. 

Any help or feedback would be greatly appreciated!

Thank you, 

Josh Levy


The income should be allocated based on when it was earned. For interest income, or other income that was earned ratably over the year you could use a prorated days method, but income that is earned on a specific date (sale of assets for example) would go to the beneficiary as of the date the income was earned. For this reason, you must create separate records for the different beneficiaries. 

Thank you Renee! Much appreciated. :-)


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