Corpus
Definition
The term “Corpus” refers to the principal or the actual property within an estate, trust, devise, or bequest from which income is generated. This can encompass a variety of assets, including funds, real estate, tangible, or intangible property.
- Estate and Trust Law: In the context of estate and trust law, the corpus is the body of the estate— the core principal or assets that generate income or yield benefits to the beneficiaries.
- Civil Law: In civil law, corpus is used to describe a positive fact, as opposed to a mere possibility.
Examples
- Estate Planning: A wealthy individual establishes a trust, placing $1,000,000 in the fund (the corpus) for the benefit of her grandchildren. The income generated from the corpus will be used to cover educational expenses.
- Real Estate Trust: A person sets up a real estate trust assigning various properties as the corpus. These properties generate rental income, benefiting specific individuals outlined in the trust agreement.
- Intangible Property: A businessman transfers his stock portfolio to a trust. The stock portfolio forms the corpus, and dividends generated are distributed to the designated beneficiaries.
Frequently Asked Questions (FAQs)
Q1: Can the corpus of a trust or estate be modified? A1: Yes, the corpus can be modified under certain conditions, aligned with the terms outlined in the trust agreement or the will.
Q2: What happens to the corpus after the trust term ends? A2: When a trust term ends, the corpus is typically distributed to the remainder beneficiaries as specified by the trust document.
Q3: Who manages the corpus in a trust? A3: The corpus is managed by a trustee, who is responsible for ensuring that the terms of the trust are adhered to and that the assets are properly managed.
Q4: Can corpus include both tangible and intangible assets? A4: Yes, the corpus can include both tangible assets (e.g., real estate, vehicles) and intangible assets (e.g., stocks, bonds, intellectual property).
Q5: Are there tax implications associated with the corpus of a trust? A5: Yes, there can be tax implications on the income generated by the corpus, managed according to the specific tax laws and regulations applicable.
Related Terms
- Estate: An estate consists of all the assets and liabilities left by an individual at death. It is the net worth of a person at any point in time.
- Trust: A fiduciary arrangement allowing a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.
- Devise: The distribution of real property through a will.
- Bequest: The act of giving personal property through a will.
Online References and Resources
- Investopedia - Trust: An article explaining the concept of a trust.
- IRS - About Estates: Information provided by IRS about estates and tax implications.
- Nolo - Basics of Trusts: Comprehensive guide to understanding trusts and estates.
Suggested Books for Further Studies
- “Wills and Trusts Kit For Dummies” by Aaron Larson
- “Principles of Estate Planning” by Carolynn Tomin and Colleen Carcone
- “The Bloomberg Tax Guide to Trusts and Estates” by Michael J. Karstaedt
Fundamentals of Corpus: Estate Planning Basics Quiz
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