what is a qualified trust 
a qualified trust is a tax advantaged fiduciary relationship between an employer and an employee in the form of a stock bonus pension or profit sharing plan in a qualified trust the underlying beneficiary may use his or her life expectancy to determine required minimum distribution rmd amounts but other considerations like gender race or salary cannot be used understanding qualified trustsa trust may be qualified or non qualified according to the irs a qualified plan carries certain tax benefits to be qualified a trust must be valid under state law and must have identifiable beneficiaries in addition the ira trustee custodian or plan administrator must receive a copy of the trust instrument if a qualified trust is not structured correctly disbursements are taxable by the irs section 401 a of the internal revenue code authorizes and sets forth the requirements for what is considered a qualified trust stipulations exist to be sure that an employer does not discriminate among employees when contributing to a qualified trust for example an employer may not discriminate in favor of employees that are more highly compensated contributions must be uniform across an organization other types of trustsin addition to qualified trusts there is a myriad of other trust types in a charitable lead trust for example beneficiaries are able to reduce their taxable income by donating a portion of the trust s income to charity after a specified period of time the remainder of the trust is transferred to the beneficiaries in a bare trust a beneficiary has the absolute right to the capital and assets within the trust as well as the income these assets generate such as dividends while a trustee will often bear responsibility for managing the trust assets in a prudent manner the trustee does not determine how or when the trust s capital or income is distributed a personal trust is a type of trust that a person sets up for himself or herself as the beneficiary as separate legal entities personal trusts that have the authority to buy sell hold and manage the property for the benefit of their trustor and can accomplish a variety of important objectives for example a young adult may set up a personal trust to pay for a graduate school program or professional education down the line 