1Listen Wendy is the settlor of a discretionary trust into which she settled $300,000. Income and capital beneficiaries of the trust include Wendy and her two adult children. Wendy is also the sole trustee. Given this arrangement, who is responsible for the tax on the income earned by the trust? The trustee can elect to have either the trust assume responsibility for the tax on the income or to allocate responsibility for the tax equally to the three beneficiaries. Wendy. The trust. Wendy and her two children, in equal proportions