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 Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, also known as the Rabbi Trust, is a specialized financial arrangement designed to provide executive employees with additional retirement benefits outside the standard qualified retirement plans. This trust is established by employers in Wake, North Carolina to set aside funds for the benefit of their executive employees. The primary goal of the trust is to accumulate earnings on a tax-deferred basis, allowing executives to receive supplemental income in retirement. One type of Wake North Carolina Nonqualified Deferred Compensation Trust is the Defined Contribution Rabbi Trust. Under this structure, the employer contributes a predetermined amount to the trust on behalf of the executive employees. The funds are invested and grow over time, providing additional income upon retirement. Another type of Wake North Carolina Nonqualified Deferred Compensation Trust is the Defined Benefit Rabbi Trust. In this case, the employer promises to pay a specific benefit to the executive employees upon retirement. The trust is funded by the employer to ensure the availability of funds to meet these future obligations. The Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust offers several key advantages. Firstly, it allows executive employees to accumulate funds for retirement on a tax-deferred basis, potentially resulting in higher after-tax retirement income. Secondly, the trust offers protection to executive employees in the event of the employer's insolvency or bankruptcy, as the funds are held in a separate trust account. Lastly, the trust provides flexibility to the employer in terms of the timing and amount of contributions, making it an attractive compensation tool. In summary, the Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized financial arrangement that allows employers to provide additional retirement benefits to their executive employees. With its tax advantages, asset protection features, and flexibility, this trust serves as a valuable tool in executive compensation planning.The Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees, also known as the Rabbi Trust, is a specialized financial arrangement designed to provide executive employees with additional retirement benefits outside the standard qualified retirement plans. This trust is established by employers in Wake, North Carolina to set aside funds for the benefit of their executive employees. The primary goal of the trust is to accumulate earnings on a tax-deferred basis, allowing executives to receive supplemental income in retirement. One type of Wake North Carolina Nonqualified Deferred Compensation Trust is the Defined Contribution Rabbi Trust. Under this structure, the employer contributes a predetermined amount to the trust on behalf of the executive employees. The funds are invested and grow over time, providing additional income upon retirement. Another type of Wake North Carolina Nonqualified Deferred Compensation Trust is the Defined Benefit Rabbi Trust. In this case, the employer promises to pay a specific benefit to the executive employees upon retirement. The trust is funded by the employer to ensure the availability of funds to meet these future obligations. The Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust offers several key advantages. Firstly, it allows executive employees to accumulate funds for retirement on a tax-deferred basis, potentially resulting in higher after-tax retirement income. Secondly, the trust offers protection to executive employees in the event of the employer's insolvency or bankruptcy, as the funds are held in a separate trust account. Lastly, the trust provides flexibility to the employer in terms of the timing and amount of contributions, making it an attractive compensation tool. In summary, the Wake North Carolina Nonqualified Deferred Compensation Trust for the Benefit of Executive Employees — a Rabbi Trust is a specialized financial arrangement that allows employers to provide additional retirement benefits to their executive employees. With its tax advantages, asset protection features, and flexibility, this trust serves as a valuable tool in executive compensation planning.
