A method of deferring compensation for executives is the use of a rabbi trust. The instrument was named - rabbit trust - because it was first used to provide deferred compensation for a rabbi. Generally, the Internal Revenue Service (IRS) requires that the funds in a rabbi trust must be subject to the claims of the employer's creditors.
This information is current as of December, 2007, but is subject to change if tax laws or IRS regulations change. Current tax laws should be consulted at the time of the preparation of such a trust.
Los Angeles, California is home to various financial instruments designed to meet the unique needs of executive employees. One such tool is the Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, commonly known as a Rabbi Trust. This type of trust enables employers to set aside funds for the future compensation of key executives, while still maintaining some level of control over these assets. A Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust allows employers to defer a portion of an executive's compensation, typically in the form of bonuses or other supplemental income. These deferred amounts are then placed into a trust, separate from the employer's general assets but held for the exclusive benefit of the executive employees. The trust is known as a "Rabbi Trust" due to its origins in a landmark court case involving the compensation of a rabbi. While the name may suggest religious connotations, a Rabbi Trust is not exclusive to any particular religion and is commonly used across various industries. The trust assets are set aside to meet the future obligations of the employer for paying deferred compensation to the executive employees. By placing these funds in a trust, the employer creates a legal separation between the company's general assets and the deferred compensation, which provides a level of protection for the executives involved. Several variations of the Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust exist to accommodate different employer needs. Some common types include: 1. Granter Trust: In this type of trust, the employer retains control over the trust assets and the earnings from those assets are taxed to the employer, providing potential tax advantages. 2. Secular Trust: This variant of the Rabbi Trust does not have any religious affiliation and is often used by employers who prefer a more neutral name for the trust. 3. Mutual Fund Trust: In this arrangement, the deferred compensation is invested in mutual funds, allowing participants to have a range of investment options and potentially earn higher returns. 4. Insurance Company Trust: Some employers choose to work with an insurance company to establish the trust. In this case, insurance products such as annuities may be used to provide income to the executive employees upon retirement or other triggering events. Overall, a Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a valuable tool for employers seeking to reward, retain, and incentivize top talent. It provides a mechanism for deferring compensation while offering tax advantages and independent asset protection for executive employees.Los Angeles, California is home to various financial instruments designed to meet the unique needs of executive employees. One such tool is the Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, commonly known as a Rabbi Trust. This type of trust enables employers to set aside funds for the future compensation of key executives, while still maintaining some level of control over these assets. A Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust allows employers to defer a portion of an executive's compensation, typically in the form of bonuses or other supplemental income. These deferred amounts are then placed into a trust, separate from the employer's general assets but held for the exclusive benefit of the executive employees. The trust is known as a "Rabbi Trust" due to its origins in a landmark court case involving the compensation of a rabbi. While the name may suggest religious connotations, a Rabbi Trust is not exclusive to any particular religion and is commonly used across various industries. The trust assets are set aside to meet the future obligations of the employer for paying deferred compensation to the executive employees. By placing these funds in a trust, the employer creates a legal separation between the company's general assets and the deferred compensation, which provides a level of protection for the executives involved. Several variations of the Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust exist to accommodate different employer needs. Some common types include: 1. Granter Trust: In this type of trust, the employer retains control over the trust assets and the earnings from those assets are taxed to the employer, providing potential tax advantages. 2. Secular Trust: This variant of the Rabbi Trust does not have any religious affiliation and is often used by employers who prefer a more neutral name for the trust. 3. Mutual Fund Trust: In this arrangement, the deferred compensation is invested in mutual funds, allowing participants to have a range of investment options and potentially earn higher returns. 4. Insurance Company Trust: Some employers choose to work with an insurance company to establish the trust. In this case, insurance products such as annuities may be used to provide income to the executive employees upon retirement or other triggering events. Overall, a Los Angeles California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a valuable tool for employers seeking to reward, retain, and incentivize top talent. It provides a mechanism for deferring compensation while offering tax advantages and independent asset protection for executive employees.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
