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.
Travis Texas Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized financial arrangement designed for executive employees in Travis Texas. This type of trust serves as a vehicle to provide deferred compensation benefits that are not subject to tax until they are distributed. The Travis Texas Nonqualified Deferred Compensation Trust helps attract and retain high-level executives by offering them a tax-efficient way to defer a portion of their compensation. It provides eligible executives with the opportunity to defer a portion of their salaries, bonuses, or other forms of compensation into the trust. These deferred amounts can then be invested and potentially grow over time, allowing executives to accumulate wealth to support their future financial goals. The trust operates as a Rabbi Trust, which means that it remains subject to the claims of the company's general creditors. However, it qualifies for favorable tax treatment by adhering to certain rules and regulations set forth by the Internal Revenue Service (IRS). This enables executives to defer taxes on their compensation until they receive distributions from the trust, typically during retirement when their tax bracket may be lower. There may be variations or different types of Travis Texas Nonqualified Deferred Compensation Trusts for the Benefit of Executive Employees — a Rabbi Trust, tailored to meet the specific needs and preferences of different companies or executives. Some possible variations of this trust could include: 1. Defined Contribution Rabbi Trust: This type of trust involves executives contributing a specific amount or percentage of their compensation into the trust. The contributions are usually invested, and the ultimate distribution is determined by the amount accumulated in the trust and the investment performance. 2. Supplemental Executive Retirement Plan (SERP): A SERP involves the implementation of a nonqualified deferred compensation plan, usually in the form of a trust, to provide additional retirement benefits to highly compensated executives. This type of trust can be structured in conjunction with a Rabbi Trust to ensure tax-efficient deferred compensation benefits. 3. Split Dollar Life Insurance Trust: This type of trust combines life insurance with deferred compensation. The trust is established to fund life insurance policies, and the company and the executive share the premiums. The cash value of the policy can be used as a tax-effective vehicle for deferred compensation. Overall, Travis Texas Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust offers an attractive way for executives to enhance their retirement savings by deferring taxable compensation. It allows executives to take advantage of tax-deferred growth potential and provides flexibility in structuring the trust to meet their specific objectives.Travis Texas Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized financial arrangement designed for executive employees in Travis Texas. This type of trust serves as a vehicle to provide deferred compensation benefits that are not subject to tax until they are distributed. The Travis Texas Nonqualified Deferred Compensation Trust helps attract and retain high-level executives by offering them a tax-efficient way to defer a portion of their compensation. It provides eligible executives with the opportunity to defer a portion of their salaries, bonuses, or other forms of compensation into the trust. These deferred amounts can then be invested and potentially grow over time, allowing executives to accumulate wealth to support their future financial goals. The trust operates as a Rabbi Trust, which means that it remains subject to the claims of the company's general creditors. However, it qualifies for favorable tax treatment by adhering to certain rules and regulations set forth by the Internal Revenue Service (IRS). This enables executives to defer taxes on their compensation until they receive distributions from the trust, typically during retirement when their tax bracket may be lower. There may be variations or different types of Travis Texas Nonqualified Deferred Compensation Trusts for the Benefit of Executive Employees — a Rabbi Trust, tailored to meet the specific needs and preferences of different companies or executives. Some possible variations of this trust could include: 1. Defined Contribution Rabbi Trust: This type of trust involves executives contributing a specific amount or percentage of their compensation into the trust. The contributions are usually invested, and the ultimate distribution is determined by the amount accumulated in the trust and the investment performance. 2. Supplemental Executive Retirement Plan (SERP): A SERP involves the implementation of a nonqualified deferred compensation plan, usually in the form of a trust, to provide additional retirement benefits to highly compensated executives. This type of trust can be structured in conjunction with a Rabbi Trust to ensure tax-efficient deferred compensation benefits. 3. Split Dollar Life Insurance Trust: This type of trust combines life insurance with deferred compensation. The trust is established to fund life insurance policies, and the company and the executive share the premiums. The cash value of the policy can be used as a tax-effective vehicle for deferred compensation. Overall, Travis Texas Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust offers an attractive way for executives to enhance their retirement savings by deferring taxable compensation. It allows executives to take advantage of tax-deferred growth potential and provides flexibility in structuring the trust to meet their specific objectives.
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.
