June 1, 2012
Gina M. Barry, Esq.
When it comes to protecting assets from nursing home costs, many believe that the solution is to place those assets in a trust. In some circumstances, establishing the type of trust required to obtain asset protection may carry great risk. Nonetheless, in the right circumstances, a smart choice could be the IDIOT Trust.
An IDIOT Trust is an Intentionally Defective Income Only Trust. As the name of this trust suggests, this trust will provide you only with income. A home is the most common asset placed in such a trust. When your home is placed in the trust, income may be received in the form of rents paid or there may be no income generated at all. When other investments are placed in the trust, those accounts will generate interest income. All income is paid to you as the person who established the trust.
The intentional defect in this trust is that the trust will be ignored for income tax purposes...
You may read more at the link below.
by: Gina M. Barry