Rabbi Trust Law and Legal Definition

Rabbi trust is a kind of trust in the U.S. set up for employees of a company as a compensation plan. It is used by businesses or entities to defer taxability. This trust fund is highly regulated to prevent employers from having any access to the money once it is placed into the fund, although the money can be forfeited if all of the strict guidelines are not met. Rabbi trust create security for employees because the assets within the trust are outside the control of the employers and are irrevocable.