by Thomas D. Begley, Jr., CELA
The following chart compares the advantages and disadvantages of an outright transfer of assets and putting assets in a Children’s Trust.
| Trusts v. Transfers Comparison | ||||
| Issue | Children’s Trusts | Individuals | ||
| Look-Back | Five Years | Five 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 Exclusion | Yes | No | ||
