I have been told that I can assign income to a trust and I will not be taxed on that income. If a trustee attempts to hold property for his own benefit, the transfer is generally treated as a fraudulent conveyance under state law and is not recognized for federal income tax purposes.
Common synonyms are settlor, creator, and trustor.
For all trusts, the Internal Revenue Code controls federal income tax consequences. Whether a trust is valid or invalid under state law, the common law, or any other law generally does not impact federal income taxation. Many recent trust arrangements have been held by the courts to be shams with no economic substance. The income and expenses of such arrangements are attributed to the actual earner of the income, typically the individual grantor or other individual on whom the trust depends for the production of income or the providing of services. I have been told that I can assign income to a trust and I will not be taxed on that income.