Distributions can be made from the Trust assets and income during the term of the trust, or when the trust is terminated. The type of the trust guides when distributions are to be made. For example a “Simple” trust distributes the income annually, a “Complex” trust retains income and then pays tax in the trust for the retained income. The trust document should give guidance as to whom and when the distributions are to be made. It is very important for the trustee to account for these distributions as they determine the tax consequences to the beneficiaries and the trust. The trustee will often consult with the trust CPA and the trust attorney to assist in the proper distribution amounts and tax treatment. The trustee will also work with the Investment Adviser to create trust income that is either taxable or non-taxable, is more geared toward appreciation and capital gains, or income from dividends and interest. The planning of distributions from of Real Estate or Business Interests held in trust, would require the same evaluation.