Choice "d" is correct. A complex trust may distribute principal, so this is
the type of trust that was created.
Choice "b" is incorrect. A simple trust may not distribute principal, and the
facts tell us that $6,000 of principal must be distributed annually to the
beneficiary. Therefore, a simple trust could not have been created.
Choice "a" is incorrect. A grantor trust could not have been created, as it
requires that a person transfer property to a trust and retain certain powers
over the trust (or treat the trust as being owned by the transferor for income
tax purposes). In this case, Brown does transfer property, but Brown retained no
powers over the trust.
Choice "c" is incorrect. A revocable trust was not created because Brown
retained no powers over the trust and, thus, no right to revoke it.
