If you set up a trust, you are taxed on that contribution to the trust, correct? And then from there, it grows, taxed at potentially lower tax rates because it would pay the trust tax rate? And then disbursements are tax free unless they are income disbursements to the beneficiaries?
Is anything wrong in the above? I feel like I’ve come across very little trust Qs specifically referring to the tax advantages of trusts. Looking to clarify.
Pretty much everything u said is wrong 
Is it a revocable living trust or irrevocable trust? How much money are your contributing? In the US, you can contribute up to the annual gift limit with no tax issues… and when you go over that amount, it just adds to your lifetime exemption max.
No the distributions are not tax free. The trust is going to be taxed annually on any income (usually trust tax rate is higher than individual tax rates), and distributions will get hit with capital gains, dividends etc. Trust taxes are complicated and depend son the type of trust too. The only thing the trust avoids, if its an irrevocable trust, is avoids estate taxes because it’s removed from your estate!
So no, you do not get taxed unless its a very large transfer. The trust is just like another entity… do you get taxed for contributing to your dad’s wallet?
I believe this is partially true as a “progressive tax” is based on the income levels. And typically is low for trusts vs the HNWI donor
U tell me, what’s higher… Trust tax rates or individual/marriage tax rates?
125, I think we are complicating this.
The marginal tax rate, the tax on my next € of my income, of the donor is likely more than that of the trust. Even if the rate tables show higher rates for trusts.