Nonprofit organizations usually use trusts in conditions exactly where revenue is collected, invested, or passively managed. By way of example, scholarship funds and grants for charitable purposes are frequently administered by means of trusts. Employee positive aspects arrangements, which include tax-qualified retirement plans - 401(k)s - and welfare benefit plans - 419(e)s - also frequently use trusts. For the reason that the trust is usually a separate entity, it might personal and manage property in its personal name and may distribute such property in accordance with its terms (which are noted inside the legal document that creates it). Trusts is usually tax exempt, but only if they meet the 501(c)(three) needs.
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