Simple Trusts must meet criteria set by the IRS:
- Must be a non-grantor trust
- Must distribute income earned on trust assets to beneficiaries annually
- Make no principal distributions
- Make no distributions to charity
Complex Trusts must do one of the following annually:
- Not distribute all of its income to beneficiaries
- Distribute some or all of the principal assets to beneficiaries
- Distribute any assets to charitable organizations
The Bulletproof Trust is a complex trust by definition of its ability to be for general welfare and nonsequential distribution of assets to beneficiaries.