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. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Grantor

    1. A seller of either call or put options who profits from the ...
  4. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Revocable Trust

    A trust whereby provisions can be altered or canceled dependent ...
RELATED FAQS
  1. When can benefits be received from a provident fund?

    Like most retirement savings vehicles, participants in provident funds are eligible to receive benefits at retirement. However, ... Read Full Answer >>
  2. Is Social Security Income a perpetuity?

    Because Social Security income does not continue indefinitely, it cannot be classified as a perpetuity. What Is a Perpetuity? A ... Read Full Answer >>
  3. What types of investments are allowed in a provident fund?

    Different provident funds have different investment rules and restrictions. The allowable investments in an Indian provident ... Read Full Answer >>
  4. How does a provident fund compare to U.S. Social Security?

    A provident fund shares many attributes of the U.S. Social Security program, including government sponsorship and set contribution ... Read Full Answer >>
  5. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  6. How is maintenance of standard of living for survivors accomplished in estate planning?

    Estate planning is an integral component of comprehensive financial planning, as it allows individuals and couples to maintain ... Read Full Answer >>
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. Taxes

    A Quick Guide to High-Net-Worth Estate Planning

    A quick estate planning guide for high-net-worth individuals to help minimize taxes and costs, protect assets and plan for care.
  8. Personal Finance

    Living Trusts vs. Simple Wills: A Comparison

    A look at wills versus living trusts and when to choose one over the other.
  9. Retirement

    How to Establish a Blind Trust

    ...and the reasons why you might want to do so.
  10. Insurance

    Indexed Universal Life Insurance: The Pros & Cons

    What you need to know, to see if these vehicles fit into your financial plan.

You May Also Like

Hot Definitions
  1. Radner Equilibrium

    A theory suggesting that if economic decision makers have unlimited computational capacity for choice among strategies, then ...
  2. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  3. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  4. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  5. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  6. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!