The top income tax rate for trusts is 39.4% for un-distributed income over $11,950. Add on another 3.8% medicare tax for un-distributed investment income and you are over 40%. In states like Florida where trustee fees and perhaps other expenses are paid half from income, you can see your that income dwindle. Beneficiaries, and trustees, of trusts should consider asset selection more carefully than ever before. Consider holding long term growth assets in trusts and keeping your bonds, REITS and high yielding stocks in your IRA or qualified retirement plan.