These new trusts have become more desirable because the new prudent investor rule significantly reduces the distinction between income and principal. In this Article, the author reviews the elements of these opinions and certain current proposals to make the opinion issuing process more efficient and less contentious. He advocates use of a generic qualification and assurance provision as an alternative to the laundry list and other approaches. Among the most significant of the changes was the creation of a new type of trust that may qualify as an S corporation shareholder. She then compares the advantages and disadvantages of using an ESBT with those of other forms of trust that may hold S corporation stock, including qualified Subchapter S trusts and subpart E trusts.
Emphasis is placed on determining how much a trust can pay out and still keep up with inflation.
Using his model, the author compares different types of trusts and concludes that the total return unitrust is superior in most applications.