Future Business Leaders of America (FBLA) Agribusiness Practice Test

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Who benefits from the income and principal of a trust?

  1. The trustee

  2. The grantor only

  3. The beneficiaries

  4. The executor

The correct answer is: The beneficiaries

The beneficiaries of a trust are the individuals or entities designated to receive the income and principal generated by the trust. In a trust arrangement, the grantor establishes the trust and conveys their assets into it for the benefit of the beneficiaries. The trustee manages the trust and ensures that it operates according to the terms set forth by the grantor, but does not benefit personally from the trust's assets. The income and principal produced by the trust are meant to support the financial needs or objectives of the beneficiaries, fulfilling the primary purpose of the trust.

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