Pot trust
One pooled trust for a class (e.g., all grandchildren). Trustee distributes by need among class members — not equal shares by default. May divide into separate shares when youngest reaches a set age.
| Facet | Detail |
|---|---|
| Also called | Family pot trust, common pot, sprinkling trust, one-pot trust |
| A-B / A-B-C role | None |
| When created | Testamentary or lifetime |
| Revocable | No once funded irrevocably |
| Inter vivos / testamentary | Either |
| Typical beneficiaries | Class — "all grandchildren" |
| Primary purpose | Flexible fairness as family grows; simpler than many separate trusts early on |
| Marital deduction | No |
| Uses estate exclusion | At funding |
| In survivor's estate | No |
| Basis step-up | At grantor death if testamentary |
| Income tax | Single 1041 for the pool |
| Crummey powers | Common for lifetime grandchild gifting |
| GST / dynasty | GST allocation often used |
| Spendthrift | Yes |
| See-through (IRA) | Unusual as IRA trust |
| Key tradeoff | Flexibility vs disputes over unequal needs |