ABA Family Legal Guide

Estate Planning

Trusts and Living Trusts

Living Trusts

Why doesn't a revocable living trust save taxes?

When you put property in a revocable living trust, the trustee becomes its owner, which is why you must transfer title to the property from your own name to that of the trustee. But you retain the right to use and enjoy the property and, because you do, under the tax law the property in the trust belongs to you for tax purposes. Thus, if the trust receives income from the assets, you must report the income from the trust on your individual income tax return.