Irrevocable Income-Only Trust - IIOT

AAA

DEFINITION of 'Irrevocable Income-Only Trust - IIOT'

A type of living trust often used for Medicaid planning. It protects assets from being sold to pay for nursing home and other long-term care expenses, so that the assets can be passed on to beneficiaries. Once assets are transferred into the trust, certain restrictions are placed on their use. However, the grantor retains the right to any income generated by the trust assets. The grantor also has the right to use, live in and sell any real estate held in the trust, as well as buy another property with the proceeds of any sale.

INVESTOPEDIA EXPLAINS 'Irrevocable Income-Only Trust - IIOT'

The trust agreement should describe the trust name, trust property, appointment of trustee, appointment of trust protector, power over trust property, when beneficiaries may appoint a successor trust protector, fees and expenses due to the trust protector, the purpose of the trust and the management and distribution of the trust during the grantor's lifetime. By requiring such detail, IIOTs leave little room for doubt and are nearly impossible to break as long as the trustor was in his or her right mind at the time of the trusts creation.

RELATED TERMS
  1. Declaration Of Trust

    A statement made by the title holder of a piece of property that ...
  2. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  3. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  4. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  5. Revocable Trust

    A trust whereby provisions can be altered or canceled dependent ...
  6. Grantor

    1. A seller of either call or put options who profits from the ...
Related Articles
  1. Retirement

    6 Estate Planning Must-Haves

    You need an estate plan even if you don't have significant assets. Learn what you need to include in yours.
  2. Options & Futures

    How To Avoid Taxation On Life Insurance Proceeds

    Decrease the value of your taxable estate and prevent the tax man from getting you one last time.
  3. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  4. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  5. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  6. Retirement

    Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  7. survivor benefits represent a powerful component of the Social Security program.
    Retirement

    How do Survivor Benefits Work?

    With nearly 5 million windows and widowers receiving monthly benefits from their deceased spouse’s earnings, survivor benefits represent a powerful component of the Social Security program. Rob ...
  8. The average retiree’s check will rise by 1.7% in 2015, the Social Security Administration says. And the ceiling on taxable earnings will rise, as well.
    Professionals

    How Social Security Will Change In 2015

    The average retiree’s check will rise by 1.7% in 2015, the Social Security Administration says. And the ceiling on taxable earnings will rise, as well.
  9. Thanks to the Affordable Care Act, you can no longer be denied health insurance for having a pre-existing or chronic medical condition.
    Insurance

    Choosing A Health Plan For Your Chronic Illness

    Thanks to the Affordable Care Act, you can no longer be denied health insurance for having a pre-existing or chronic medical condition.
  10. What's a Trust Fund?
    Personal Finance

    What's a Trust Fund?

    A trust fund is a fund comprised of a variety of assets, established by a grantor, to provide financial security to an individual, most often a child or grandchild - or organizations, such as ...

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center