#trust-accounting
Fiduciary and trust accounting for prepaid, escrow, and client funds
A testamentary trust springs from your US will after probate — it staggers inheritances for minors but can't skip probate like a living trust.
A BDIT makes you the income-tax owner of assets you don't own for estate tax under Section 678 — sell to it, keep control, freeze your estate.
Under US trust law, a discretionary trust plus a spendthrift clause blocks most creditors; a support trust's HEMS payments can be reached.
Fiduciary accounting income, not taxable income, sets trust distributions — dividends and rent to the income beneficiary, capital gains to principal.
Miss one of three tests and your trust files Form 1041 as complex — taxed at 37% past $16,000 instead of at your beneficiary rate.
A QTIP trust claims the marital deduction under Section 2056 now while you — not your spouse — decide where the assets go after your spouse dies.
The IRS finalized TD 10051: CRAT-plus-annuity shelters are listed transactions. Disclose on Form 8886 by October 7, 2026, or face six-figure penalties.
CosmoLex owns the trust ledger, Clio owns integrations, MyCase owns simplicity — firms already on QuickBooks should pair it with a legal layer.
A rabbi trust defers tax but leaves the employee behind your creditors in bankruptcy; a secular trust is IRS-taxed at funding. Pick by who bears credit risk.
A domestic asset protection trust shields personal assets from future lawsuits, but only if you fund it while solvent, years before any claim arises.
Advance rent is taxable the year you receive it; a refundable security deposit is not income until you keep it. The split, the state escrow and interest rules underneath it, and the journal entries that keep both straight.
Solo patent agents bill 30–50% below large-firm attorneys, but the discount only works with disciplined books — unearned fees held in a client trust account under 37 CFR 11.115, milestone-based flat-fee recognition, and per-matter profitability tracking across multi-year prosecutions.
