COMPARISON BETWEEN TRANSFERS TO INCOME ONLY TRUSTS AND TRANSFERS TO CHILDREN
by: Begley Law Group
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 | ||