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.
The Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, also known as a Rabbi Trust, is a type of trust designed to provide benefits to top-level executives within an organization, specifically in Santa Clara, California. This trust is created to defer compensation for executives beyond what can be contributed to traditional qualified retirement plans. This particular trust serves as a legally established vehicle to withhold executive compensation and hold it in a trust fund until a specified future distribution date or event. It allows executives to defer receiving a portion of their income, thereby delaying taxes on the deferred compensation until it is actually distributed. The Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is set up to comply with the requirements of the Internal Revenue Code (IRC) Section 402(b)(3). It ensures that the deferral remains taxable to the executive until it is paid out or realizable. In terms of different types of Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust, variations may exist based on specific provisions within the trust agreement. These variations can include: 1. Vesting Schedule: The trust can have different vesting schedules which outline when and how the deferred compensation becomes fully owned by the executive. 2. Investment Options: Executives may have the ability to direct the investment of their deferred compensation, choosing from a range of investment options offered by the trust. 3. Distribution Timing: Depending on the terms of the trust, executives can elect when and how they want their deferred compensation to be distributed, whether as a lump sum or in regular installments. 4. Change in Control Provisions: The trust may incorporate provisions that account for a change in control or ownership of the company, specifying how the deferred compensation will be treated in such situations. 5. Creditor Protection: The trust can include provisions to protect the deferred compensation from potential creditor claims, providing executives with an added layer of security. Overall, the Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized tool used by organizations in Santa Clara, California, to attract and retain top executives by offering a tax-efficient deferred compensation plan.The Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, also known as a Rabbi Trust, is a type of trust designed to provide benefits to top-level executives within an organization, specifically in Santa Clara, California. This trust is created to defer compensation for executives beyond what can be contributed to traditional qualified retirement plans. This particular trust serves as a legally established vehicle to withhold executive compensation and hold it in a trust fund until a specified future distribution date or event. It allows executives to defer receiving a portion of their income, thereby delaying taxes on the deferred compensation until it is actually distributed. The Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is set up to comply with the requirements of the Internal Revenue Code (IRC) Section 402(b)(3). It ensures that the deferral remains taxable to the executive until it is paid out or realizable. In terms of different types of Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust, variations may exist based on specific provisions within the trust agreement. These variations can include: 1. Vesting Schedule: The trust can have different vesting schedules which outline when and how the deferred compensation becomes fully owned by the executive. 2. Investment Options: Executives may have the ability to direct the investment of their deferred compensation, choosing from a range of investment options offered by the trust. 3. Distribution Timing: Depending on the terms of the trust, executives can elect when and how they want their deferred compensation to be distributed, whether as a lump sum or in regular installments. 4. Change in Control Provisions: The trust may incorporate provisions that account for a change in control or ownership of the company, specifying how the deferred compensation will be treated in such situations. 5. Creditor Protection: The trust can include provisions to protect the deferred compensation from potential creditor claims, providing executives with an added layer of security. Overall, the Santa Clara California Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized tool used by organizations in Santa Clara, California, to attract and retain top executives by offering a tax-efficient deferred compensation plan.
