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 | ||
