The Sprinkling Provision of a Trust

A sprinkling provision can be structured in the trust so that you as trustee, can sprinkle, or distribute income to the trust beneficiaries at your discretion. This provision can be included in many different types of trusts.

Beneficiaries can be your children, your surviving spouse, parents, an ex-spouse and other people that can benefit from the income. This method may allow a trustee to sprinkle income to others who may be taxed at a lower rate than the surviving spouse. A sprinkling provision can also be an income tax benefit by providing income to children under the age of 14. Ultimately, a sprinkling provision can be combined with an accumulation provision. This method allows a trustee to pay the income to trust beneficiaries or to let the income accumulate.

Sprinkling Distribution Provisions

The trustee can be authorized to distribute income of the trust among your children and other beneficiaries based on their need or simply in the trustee’s discretion (a sprinkling power). This provision will enable you to defer the decision as to which child or other beneficiary needs the most money or assistance until the time actually arrives This method can often be advantageous since it is difficult to determine what the future needs of each child will be. Therefore, the sprinkle power provides the flexibility to allow you to make decisions when the circumstances are known. An additional provision giving the trustee the right to spend the principal (not just income) can also be provided for in the event of an emergency.

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