What are trusts and estates
A trust is an entity that holds money or property for the benefit of its beneficiaries or for law purposes. Estates are a person’s assets after they have died. Both trusts and estates are taxed on the income they generate.
Trusts often have money or property that is used as an investment to earn revenue. This revenue becomes the trust’s income as it is earned. The initial settlement on the trust isn’t income for tax purposes.
Estates can continue to earn money after a person has died. This income follows trust tax rules.