Q: What is the difference between being an interested person in a trust and a non interested person.

A: Interested "person" may be the grantor (creator) of the trust, a trustee and/or a beneficiary. Interested "trustee"- The term Interested Trustee means a Trustee who:

is a transferor or beneficiary;

is related or subordinate to a transferor or beneficiary;

can be removed and replaced by a transferor with either the transferor or a party who is related or subordinate to the transferor; or

can be removed and replaced by a beneficiary with either the beneficiary or a party who is related or subordinate to the beneficiary.

For purposes of this Subsection, transferor means a person who transferred property to the trust during that person’s lifetime, including a person whose disclaimer resulted in property passing to the trust. A person is only a transferor during his or her lifetime. Beneficiary means a person who is or may become eligible to receive income or principal from the trust under the terms of the trust, even if this person has only a remote contingent remainder interest in the trust, but not if the person’s only interest is as a potential appointee under a power of appointment. Related or subordinate is used as defined in Internal Revenue Code Section 672(c).

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