COMPARISON BETWEEN TRANSFERS TO INCOME ONLY TRUSTS AND TRANSFERS TO CHILDREN

by Thomas D. Begley, Jr., CELA

The following chart compares the advantages and disadvantages of an outright transfer of assets and putting assets in an Income Only Trust.

 

Trusts v. Transfers Comparison
Issue           Income Only Trusts      Children
Look-Back 5 Years 5 Years
Control None None
Risk Avoidance Yes No
Estate Recovery Maybe No
Income Tax Parent Children
Gift Tax Maybe Yes
Step Up in Basis Yes No
Principal Residence Exclus. Yes No

 

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