Irrevocable Income Only Trusts
An Income Only Trust is an irrevocable trust into which you transfer title to your real estate. Whether or not you retain a Life Estate in the property will depend on your age, health and objectives and discussions with the lawyer.
Advantages- Property avoids Probate
- Provides children with a step-up in basis allowing them to sell the property tax free at your death (if a life estate was retained by you)
- Protects the property from Nursing Home costs provided five (5) years have passed since the transfer of the property to the trust
- Allows for flexibility to deal with the possible death of a child, a disabled child or substance abuse child and allows for generation skipping to grandchildren
- You could lose any tax abatement you are entitled to from the town due to age or disability
- You are not entitled to any principal from the trust, only income
This information provided herein is for general purposes only and does not to purport to give specific advice on individual matters. If you want individual advice you should contact an elder law attorney.
Mary Howie is an attorney who practices in Elder Law and Estate Planning in both New Hampshire and Massachusetts. She holds a masters degree in business administration and finance. Christine Windler is also an attorney practicing in Elder Law and Estate Planning. Attorney Windler holds a masters degree in taxation. If you have any questions, you may call them at 603-893-8008.