Wasting Trust


DEFINITION of 'Wasting Trust'

A trust that holds plan assets when a qualified plan is frozen. A "wasting trust" derives its name from the fact that its assets get depleted over time, since plan participants continue to receive payouts as required under the plan, but no new contributions are received by the trust. It may also refer to income trusts that hold depleting assets such as oil and gas.

BREAKING DOWN 'Wasting Trust'

In a wasting trust, the trustee can use part of the principal to maintain the level of payments to the beneficiaries as required under the plan . This is because income generated by the plan's assets may be insufficient to meet such payments.

  1. Voluntary Trust

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  2. Primary Beneficiary

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  3. Qualified Trust

    A tax-advantaged fiduciary relationship between an employer and ...
  4. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  5. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  6. Wasting Asset

    An item that irreversibly declines in value, as a function of ...
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