Trust agreement


D

Dick Adams

Situation:
1. I am retired and on SS disability.
2. My son Joshua gets a monthly check from SS.
3. Joshua will be 15 in February.
4. I want to put his money into mutual funds.
5. If he goes not use this money to go to college, he can
wait til I am damn well ready to give it to him.

Do not bother criticizing Point 5 because I could use that
money to support him instead of investing it for him.

A 529 plan is out of the question because he may not need
all of the money for his education. Also because I am a
retired University Professor, he gets free tuition in the
University of Maryland System.

A UGMA is also out of the question because I am not about
to dump a large sum of money on an 18 year old.

Fidelity advised me to set up a trust in his name with
Susan and I as the trustees.

So where can I find a simple trust agreement on the net?

As usual, constructive advice will be appreciated.

Dick
 
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S

Stuart A. Bronstein

Dick Adams said:
So where can I find a simple trust agreement on the net?
I'll set you up with one, Dick. Let's just say it will be
in exchange for that bottle that never quite got to you.

You have my real email. The other one will get to me, but I
only check that account occasionally.

Stu
 
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J

joetaxpayer

Dick said:
Situation:
1. I am retired and on SS disability.
2. My son Joshua gets a monthly check from SS.
3. Joshua will be 15 in February.
4. I want to put his money into mutual funds.
5. If he goes not use this money to go to college, he can
wait til I am damn well ready to give it to him.

Do not bother criticizing Point 5 because I could use that
money to support him instead of investing it for him.

A 529 plan is out of the question because he may not need
all of the money for his education. Also because I am a
retired University Professor, he gets free tuition in the
University of Maryland System.

A UGMA is also out of the question because I am not about
to dump a large sum of money on an 18 year old.

Fidelity advised me to set up a trust in his name with
Susan and I as the trustees.

So where can I find a simple trust agreement on the net?

As usual, constructive advice will be appreciated.

Dick

I wouldn't criticize point 5, as I'm right there with you.

A trust/will is something that I'd recomend using a lawyer
who knows his stuff, a trust attorney is worth his money
doing it the right way. A few comments;

1) You cannot take his money away from him. Legally, any
money already his can't be put into the trust.
2) For the money put into the trust to be a completed gift,
the trust should be irrevocable. Otherwise, it falls back
into your estate when you meet the big tax guy in the sky.
This may or may not matter to you.
3) You should consider the wording very carefully, the trust
SWMBO Taxpayer and I set up for our daughter was designed to
accept the maximum gift (10K/yr per person when started, in
2006, 12K) as a early start for her college account. If she
goes to college, it's paid for, and any leftover is paid to
only upon written request to the trustee, at 5% per year.
This gives us the option to continue the deposits well
beyond the college cost. Now, if she doesn't graduate, the
payout doesn't start till 25, still at 5% per year. Also, we
included wording so if, god forbid, we all go in one
accident, there's wording on how to distribute the account,
lump sum, not to saddle the trustee (best friend of ours)
with a job for the rest of her life.
4) The trust income has to be accounted for. If held in the
trust, it's taxed at the trust's rate, which gets high
pretty quickly. If distributed to your son, over 14, is
taxed at his rate, so I'd recommend that. The UGMA holding
those distributions is the first account I plan to tap for
my daughter's education, which may wind up being a private
high school.
5) Lastly, if you and the Mrs have life insurance, an ILIT (irrevocable
life insurance trust) may make sense. Any life insurance you own is part
of your estate, in the trust, it's made seperate, the trust is the
owner. But this would also fall under the rules you set up to protect
your son from having easy access to the money.

I hope that's helpful. And I wish the shoulder a speedy
recovery.

Joetaxpayer (at earthlink dot net)
 
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W

William Brenner

Dick said:
Fidelity advised me to set up a trust in his name with
Susan and I as the trustees.
....
As usual, constructive advice will be appreciated.
Another thought: You might want to seek a legal opinion
as to whether you can set up a restrictive trust with
money that is paid directly to him by a third party.

Some states' -- Florida is one -- UGMA age is 21, although
exceptions can be obtained at 18.

Your best bet might be to grab the checks and hide them. <g>

Bill
 
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