FAQs: Trust (irrevocable)
1. Do I need to report the assets of a revocable trust?
See the “Trust (revocable living)” entry in this guide for more information about revocable living trusts.
2. How do I report a “qualified trust” on the OGE Form 278e?
Before discussing qualified trusts, we want to give an important word of caution: Do not attempt to establish a federal executive branch qualified trust without first consulting OGE.
The Ethics in Government Act established a uniform system of qualified trusts that emphasizes independent trustees and limited communication with the employee involved.
There are two different types of qualified trusts:
- A qualified blind trust may hold most types of assets, such as cash, stocks, bonds, or mutual funds. It is important to note that any asset initially placed in the trust is not considered blind and continues to pose a potential conflict of interest until it has been divested or reduced to a value of less than $1,000. The new assets purchased by the trustee will not be disclosed to you, so they will be considered blind and will not pose conflicts of interest.
- In contrast, a qualified diversified trust must hold a portfolio of readily marketable securities. No single asset placed in the trust may be more than 5% of the total portfolio, and no more than 20% of the portfolio may be concentrated in any particular economic or geographic sector. Additionally, unlike with the qualified blind trust, the securities of an entity that has substantial activities in your primary area of federal responsibility cannot be put in the initial portfolio of a qualified diversified trust. By law, the assets of a qualified diversified trust certified by OGE do not pose conflicts of interest.
A “qualified trust” must be certified as such by the Director of OGE. Interested parties should contact OGE or an ethics official to coordinate efforts to create an appropriate type of trust. OGE has several model qualified trust documents available on our website.
3. Do I report transactions involving the assets of the trust?
You need to report transactions in an Annual, Termination, or Periodic Transaction report if you have a reportable current or future interest in the trust, unless the trust qualifies as an excepted trust.
4. Do I report my interest as a beneficiary of a legal defense fund?
Report a legal defense fund in Part 6 if you, your spouse, or your dependent child has a reportable interest in (see the main “Trust (irrevocable)” entry) or received income from the fund. Gifts to a legal defense fund for your benefit (or the benefit of your spouse or your dependent child) would be reported in Part 9.