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COMPARISON BETWEEN TRANSFERS TO CHILDREN’S TRUSTS AND TRANSFERS TO INDIVIDUALS

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

 

 

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