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The trust document is silent as to how the annuity is to be distributed?
The trust does not direct the annuity
I have switched to the Q & A format, as it is easier to understand.
Normally, the trust document states how the annuity is to be distributed. If it does not, then the Trust takes the distribution. However, to avoid tax (trusts pay tax at a higher rate than individuals) the trust can distribute the income to the beneficiaries, and the beneficiaries then can pay tax on their own tax returns. On the Form 1041, the trust will get a deduction for the payments it makes to the beneficiaries.
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