Clifford Trust (Noun)
Meaning
A trust established to shift the income to someone who is taxed at a lower rate than the grantor for a period of 10 years or more.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The wealthy businessman set up a Clifford trust to reduce his tax liability by transferring income to his children.
- A Clifford trust was established to shift the income from the high-earning executive to her lower-earning spouse.
- The lawyer advised her client to create a Clifford trust to minimize taxes on the investment income.
- The financial advisor recommended setting up a Clifford trust to take advantage of the lower tax rate on the minor children's income.
- The trust agreement specified that the Clifford trust would last for 12 years, after which the assets would revert to the grantor.