Corpus
What Is Corpus?
Corpus refers to the principal assets held within a trust or estate. It represents the original property or funds placed into the trust by the grantor, excluding income generated by those assets.
The corpus may include cash, investments, real estate, or other property transferred into the trust.
Why It Matters
The corpus forms the foundation of a trust and determines the financial resources available to benefit the trust’s beneficiaries. Trustees are responsible for managing the corpus responsibly and ensuring it is preserved or distributed according to the terms of the trust.
Proper management of the corpus helps maintain the long-term value of the trust.
How Corpus Works
When a trust is established, the grantor transfers assets into the trust. These assets collectively form the corpus.
Over time, the corpus may generate income such as:
- interest
- dividends
- rental income
- investment gains
The trust agreement determines whether beneficiaries receive income from the corpus, distributions of the corpus itself, or both.
Example
A person places $500,000 in investments and a rental property into a trust. These assets form the trust’s corpus, while rental income and dividends generated from them are considered trust income.
Corpus vs Trust Income
- Corpus refers to the principal assets placed in the trust.
- Trust income refers to earnings generated from those assets.
FAQs About Corpus
Can the corpus change over time?
Yes. The value of the corpus may increase or decrease depending on investment performance or distributions.
Who controls the corpus?
The trustee manages the corpus according to the trust agreement.
Can corpus be distributed to beneficiaries?
Yes, if the trust document allows distributions of principal.
Related Terms
