How Parents Reduce The College Tuition & Income Gap Using Kiss Trust

Posted by Tyler Phelps, Vice President of Eastern Point Trust Company on Jun 14, 2016

school2.jpgTuition costs have risen at a yearly rate that is far greater than the growth of the median household income, and they show no signs of slowing down anytime soon. This is not good news for parents, and even worse news for their students. Families must find a way to plan for their high school graduate’s tuition expenses before it is too late. While that sounds like a dooming cliché, it’s true. More high school graduates are attending college than ever before, making it difficult for students to receive sufficient financial aid. Financial aid is awarded based heavily on student need. Without proper planning, parents can hurt their student’s chance of receiving grants, scholarship, and even student loans, which can be detrimental to their child’s college plans. If this seems exaggerated, just take a look at the statistics and visualizations below:




Between the years of 2004 and 2013 (a 10-year period), tuition costs increased by $809 per year, on average. Between the years of 2004 and 2013 (a 10-year period), the median annual income increased by $1027.89 per year, on average. Seeing that the average median annual income (over the same time period) is $32,712.30 greater than the average yearly tuition cost, the difference in the average increase in the average median annual income and the annual tuition cost (which is only $218.89), seems insignificant. That’s because it is.  In fact, over the 10-year period between 2003-2014, the average annual percentage change of tuition (5.08%) is 236% higher than the average annual percentage change of median income (2.15%)Tweet: The average annual percentage change of tuition is 236% higher than the average annual percentage change of media income #KissTrust. If all of these numbers confuse you, you’re probably not alone. There’s just one thing you should take away from this. It is becoming more imperative to plan for your student’s college career. 


How to Reduce This Gap

If you are like most, you have no clue where to start. Planning for your child’s expenses seems daunting and insurmountable. The good news? Just by being here, you are already taking a step in the right direction, and college planning may be easier than you might think. There are several education accounts that parents can utilize, but they are not all same. Each type of account comes with a unique set advantages and disadvantages. While each account is different, and whether or not you have started saving for college expenses or just looking for a better alternative to college savings accounts, there is an option for you. Click here to view several types of college savings tools available to parents. 

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Tags: Irrevocable Trust, College Savings, Education Trust

[Infographic] 11 Reasons Your Family Should Have a Combined Family Trust

Posted by Tyler Phelps, Vice President of Eastern Point Trust Company on Jun 7, 2016


The notion that “all families should have a family trust” is one that many of the financially savviest advisors agree on. The advantages that family trusts haveare significant, but historically the start-up, maintenance, and administration costs were too hefty for most to undertake. Thus, family trusts have long eluded the vast majority of Americans.

Today, however, it is quite a different story. Families across America are now using Combined Family Trusts for their family, thanks to advancements in financial technologies. The landscape of trust planning has evolved, and as a result, family trusts are now an affordable viable option for families of all shapes and sizes, and the concept that family trusts are “only for the privileged” is no longer true. As a result, many families are missing out on the best way to save, protect, and pass down assets for their loved ones.

Here are 11 reasons why your family should have a Combined Family Trust (if you don’t already):

11 Reasons Your Family Should Have a Combined Family Trust

  1. Provides Asset Protection. Combined Family Trusts are often comprised of an irrevocable trust, or a combination of a revocable trust and an irrevocable trust. Using an irrevocable trust in your family trust offers the most asset protection for your family. Assets held within an irrevocable trust are not considered to be the possession of the grantor or the beneficiaries, so it can protect against creditors and other liabilities (assets in an RLT are not protected from creditors, espouses or bankruptcy).
  2. All Trusts Are Not the Same. Family trusts are flexible in nature and by design. Your family is uniquely diverse, so your trust should be, too. When you create an irrevocable family trust, you can tailor it exactly how you like. This customization ability is maximized with TrustWare™. With over 700,000 different design combinations, you can now afford a family trust that’s right for you – all while allowing you to effortlessly create a trust in less than an hour.
  3. Choose How It’s Used. When you create an irrevocable family trust, you can choose how your assets are used, when they can be received, and even when they can’t be. Award good performance (and deter poor behavior), help your family reach for new heights or support your family when they hit a low… it is your choice.
  4. Investment Growth. No matter if you are busy, relaxed, or somewhere in between, you can direct the family trust’s investments to fit your risk tolerance and investment goals. You have the control to keep your money in cash, money market funds, bonds, stocks, and even ETF’s.
  5. Combining the Benefits. By combining an RLT and an irrevocable trust, you can avoid probate, while protecting your family’s assets for generations. Better yet, you won’t lose the ability to have access and control your assets in the RLT while you’re living your life. It’s like having the key to your family’s treasure chest.
  6. Create a Legacy. Leave behind something more valuable than money can ever be…  a legacy. Become your family’s own Rockefeller, no matter how big or small your estate is. The size of even a modest estate may grow to impressive amounts over time.
  7. Avoid the Probate Headache. Combined Family Trusts can help families completely avoid the expensive and tedious process of Probate. On average, probate takes 6-12 months (with a final will) or 12+ months (without a will) depending on the estate. A recent study found that, on average, 7% of the estate's value will diminish due to the cost of the court probate process. It’s another benefit that you, and your family, will enjoy by having a family trust.
  8. Privacy (It’s No One’s Business). A major problem of only having a will is the lack of privacy that your estate receives after you pass away. All of your private matters and possessions are under public scrutiny during probate. Heirs can contest the terms and make claims against your final will, meaning the wrong things can end up in the wrong hands. The court will determine the rightful heirs and their allocation leaving your family’s financial details open to public scrutiny. A family trust creates a private and protected legal relationship between the Grantor and the beneficiaries using an irrevocable trust, so the terms that you choose cannot be altered, or left open for interpretation and public disclosure.
  9. It Can Be a Beneficiary. A Combined Family Trust can be named as the beneficiary of life insurance and other accounts. In fact, it is one of the best ways to protect against your life insurance, 401k, IRAs, and other accounts being frittered away.
  10. A Bank for Your Family. Combined Family Trusts can serve as a Family Bank. It’s advantageous and prudent for members to use a Family Bank. Selected family can borrow, lend, and transact other functions directly with the family trust on more friendly terms than with an institutional bank.
  11. Flexible, Affordable, and Secure. It has never been easier, more affordable, and quicker to start a family trust than it is today. The growth of financial technologies has closed the loop between what was available for the ultra-wealthy and the middle-class. And Kiss Trust is at the forefront of this financial revolution. Our patented trust creation software, TrustWare, is built around saving you time and money.

It’s not hard to see why families are changing the way they save for their family’s future. Getting started is effortless and quick. Creating a trust is a breeze. And the rest is just a walk in the park. Trust, it’s what we do.

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Tags: Family Trust, Combined Family Trust

The Better Alternative to Coverdell ESA That You Didn’t Know Existed

Posted by Aimee O'Grady, Child Savings Specialist on Apr 27, 2016


Explaining the Coverdell ESA

Formerly referred to as the Education IRA, the name was changed to the Coverdell Education Savings Account in 2002. A Coverdell ESA permits custodians to save money for qualified education expenses for a named beneficiary who is under the age of 18 when the account is established. In addition, the savings can be used for both higher education and certain K-12 expenses. The Coverdell ESA is a tax-free investment option that offers tax-free withdrawals when the funds are used for qualified expenses. It’s attractive for families with fewer dollars to invest, who meet the eligibility requirements and aim to use the funds for both elementary and secondary as well as higher education expenses.  

Coverdell Advantages

1)     No Relationship Required. A Coverdell ESA does not require that there be a relationship between the custodian and the beneficiary. Friends, family and even companies or other entities may establish an account and make contributions.

2)     Child Contributor. For families who earn more than the maximum income permitted, the beneficiary may make contributions to the account themselves with money gifted to them if they earn less than the maximum income allowed.

3)     Qualified Expenses. With the option to use the funds for qualified elementary and secondary school expenses, the Coverdell ESA offers expanded savings options when compared to other plans.

Coverdell Disadvantages

1)     Low Maximum Limit. With a $2,000 maximum contribution limit, the Coverdell ESA has a much lower limit than other savings plans per child.

2)     Eligibility Requirements. Families must have a modified annual adjusted gross income of under $220,000 annually, or $110,000 for a single parent. Contributions made by individuals whose income exceeds this level will be subject to penalties.

3)     Withdrawal Age. Funds must be fully withdrawn by the time the custodian turns 30, unless the individual has special needs. Certain transfers to family members are permitted.

4)     Not tax-deductible. Finally, contributions to a Coverdell ESA are not tax-deductible.

The Better Alternative You Didn’t Know Existed

The Coverdell ESA has aspects that are appealing to parents, but it comes with its own set of limitations and drawbacks. The alternative to Coverdell ESA pertinent to college and education savings is a trust. Kiss Trust is the only provider of small trusts, family trusts and education savings trusts for parents saving for their child’s education and college expenses. With a trust, there are no annual contribution limits, and like Coverdell ESAs, anyone can contribute to it. With HESM provisions included, Kiss Trust lets parents create and fund trusts that can be used for education expenses. There is no limitation on annual salary either, so these trusts are available for anyone with a need to save and protect money for a child’s education. Unlike a Coverdell ESA, you can set distribution options to extend beyond the cutoff age of 30 years old, while preserving its principal. With one trust, family members can save for a child’s education, first home, retirement, and beyond with assurance that the funds will be used for the specified reasons.

Thus, a Coverdell ESA is an attractive savings plan for many families with the inclusion of qualified elementary and secondary education expenses, but it does come with its own set of limitations. When researching savings plans for college tuition, compare advantages and disadvantages with every plan before making a final decision that you may end up regretting.

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Tags: College Savings, Education Trust

How to Create a Trust Online with Kiss Trust

Posted by Tyler Phelps, Vice President of Eastern Point Trust Company on Apr 21, 2016

How to create a custom trust online with Kiss Trust using TrustWare

Watch how to create a trust online with Kiss Trust using TrustWare! Don't worry about complicated trust forms, because you can build a custom trust in four easy steps just by answering easy questions, like who your beneficiary will be and when they can receive certain assets under specific conditions. Creating a custom trust has never been easier!

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Tags: Trust Fund, Life Hacks

Kiss Trust Makes Small Trusts Affordable For All Families

Posted by Glen Armand, CEO of Eastern Point Trust Company on Apr 12, 2016


Breaking the Barriers of Trust Accessability

Small Trusts – those ranging from $500,000 to $25 – face the challenge of traditionally high minimum trustee fees; that is until Kiss Trust’s innovative small trust service. As a new innovator in trustee services, Eastern Point Trust has removed the barrier of high fees, empowering small trusts to be created or remain in place protecting the assets under the terms and conditions the grantor originally intended.

Most traditional trust companies have a minimum trust size and minimum trustee fees designed to accommodate only high net worth clients with multimillion dollar trusts. These minimum Trustee fees typically range from $4,000 to $5,000 annually. By comparison, Eastern Point Trust Company has an annual fee of only $50. While these high minimum fees are very profitable for the traditional trust company, this “old-world” business model prevents the vast majority of Americans from utilizing trusts, which can be a cost effective financial planning tool.

By leveraging its patented trust technology Eastern Point Trust Company provides a new, cost effective solution for small trusts. Let’s take a look at just a couple of examples.

Scenario 1

Mary is a grandmother whose has an estate of cash and real estate which is valued under $100,000.  She would like to leave these assets to her two grandchildren to fund their education. Even if she could find a traditional bank trust company to serve as Trustee, they would charge her over $4,000 per year or over 4%.

Solution: With EPTC's Kiss Trust she can create the trust for only $49 and her maximum annual trustee cost would only be ½%. Additionally, while alive Mary can use the Sleeping Trust option of Kiss Trust to create the trust and operate with no annual fees.

Scenario 2

Tom created through his will a testamentary trust with over $750,000 and appointed in the will his traditional bank trust company as trustee. Tom had concerns his heirs would foolishly spend the estate and wanted the trust to exercise long term control over how the assets of the trust would be used. Within 3 years the value of trust fell to under $375,000 and the beneficiaries petitioned the court to terminate the trust due to the Trustees high minimum trustee fees. Their state's uneconomic trust provisions allowed the court to terminate the trust and payout the assets contrary to Tom's wishes solely because of the trustees high fees. As such, the small trust termination caused Tom's worst fears to be realized; as his heirs had no restrictions on the use of the assets and foolishly frittered them away.

Solution 1: Tom, could have utilized Kiss Trust to initially create the trust and not only paid lower fees while the trust was over $500,000, but also once below $500,000 the trust would have been exempt from attempts by the beneficiaries to terminate the trust as uneconomic.

Solution 2: Even if the trust has already been established, any trust can be “Decanted” or transferred using Kiss Trust which would result in lower fees, and most importantly preserved Tom's intentions as the grantor.

Starting Has Never Been Easier

Whether, creating a new trust that has modest assets (as little as $25), decanting a larger trust, or avoiding the termination of a small trust, the Kiss Trust small trust service provides the only cost effective method to economically extend the life of a trust, regardless of size.

Visit our website or contact an Eastern Point Trust Company senior trust officer to discuss how our services can solve your small trust needs and simply reduce your small trust’s current trustee fees.

Start Today for Just $20

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Tags: Small Trusts

Parents Are Rolling UTMA & 529 Plans into a Trust Due to These Tax Credits

Posted by Tyler Phelps, Vice President of Eastern Point Trust Company on Mar 25, 2016


The Shortcomings of Traditional College Saving Plans

Before trusts became a cost-effective tool for parents to save their child’s future education costs, accounts such as UTMA/UGMA and 529 plans were heavily used. 529 plans are the result of federal legislation that allowed parents to set money aside for college. However, time has shown that the high fund cost, limited investment selection, extra fees imposed by the states and restrictions of investment changes materially undermine the performance of 529 accounts. Fortunately, there is a simple, affordable, and prudent solution to their dilemma – college savings trusts.

Using Trusts to Save For College Expenses

Trusts are great tools for parents or grandparents with a desire to jumpstart their loved one’s future by saving for college expenses and beyond. Trusts can:

  • Protect assets from creditors
  • Limit the use of money for specific purposes beyond education (while the grantor is living or deceased)
  • Be named as the beneficiary of life insurance policies, 401k plans, IRAs, brokerage accounts, bank accounts, and more
  • With a properly drafted trust reserve the student’s eligibility for student aid and maximize their FAFSA awards, grants, and scholarships
  • Earn up to $600 in LTCGs, tax exempt, as of 2016

The student reaps the benefits of the college savings trust without any of the negative financial aid implications that UTMA, UGMA, and 529 plans carry. It gets even better! The trust can also safeguard the student’s eligibility for both of the federal educational tax credits, when properly drafted (like a Kiss Trust).

Parents can benefit from these educational tax credits

 The American Opportunity Tax Credit:

  • Can be utilized throughout a student’s first four years of college while pursuing an undergraduate four-year degree
  • Is worth up to $2,500 toward tuition, course-related books, supplies, and equipment
  • Can be refundable up to 40%, or $1,000, even when the student owes no taxes for the given year

Learn more about the American Opportunity Tax Credit.

The Lifetime Learning Tax Credit:

  • Can be claimed for an unlimited number of years while the student is pursuing a postsecondary degree
  • Is worth up to $2,000 toward tuition, course-related books, supplies, and equipment
  • Can’t be used with the American Opportunity Tax Credit (which is usually a higher value)

Learn more about the Lifetime Learning Tax Credit.

Problems for Parents with UTMA Accounts

Get Started

Take advantage of these tax credits while benefiting from the control provided for by a College Savings Trust. With a Kiss Trust, you can create an educational trust for your child, grandchild, or family and friends for a one-time fee of $49. TrustWare™, brought to you by Kiss Trust, hands anyone the power to build unique trusts without the help of an attorney, saving you time and money. Get started today, or chat with our support team to learn more!

Start a Kiss Trust today for just $20 (which is regularly $49) click here for more information.

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Tags: College Savings, UTMA

What Happens To an UTMA Account When a Child Plans To Skip College

Posted by Aimee O'Grady, Child Savings Specialist on Mar 11, 2016


Not all beneficiaries will attend college, but they will still have access to the funds in their UGMA/UTMA account.   

Key Takeaways
  • Beneficiaries have unrestricted access to the funds in UGMA/UTMA Accounts.            
  • Custodians can withdraw funds if they are used to benefit the beneficiary, including converting into an irrevocable education trust for the sole use of the beneficiary.
  • Withdrawal of funds by the parent or custodian after the minor is of legal age is not allowed.

A Parent’s Worst Nightmare

An UGMA/UTMA account is an easy savings tool for parents to open for their children. The beneficiaries own the assets the moment the account is created and can access the money as soon as they are of legal age, often 18 or 21. Most UTMA and UGMAs, or custodial accounts, are opened as a way to save for higher education anticipating that the beneficiary will attend college. But what happens if they choose not to?


It's Their Assets… It's Their Choice

Simply put, the beneficiary of an UGMA and UTMA account can use the funds at their discretion, making them quite unpractical as a college-savings plan. These are custodial accounts for minors, which means the custodian manages the money until the minor attains the age of majority. Once they reach the age of majority, beneficiaries have unrestricted access to the assets in the accounts to do whatever they want. They can register for higher education courses, buy a car or go on vacation, since there are no restrictions on how the money can be used.

One of the benefits of these custodial accounts, however, is that they can be converted into irrevocable trusts. Prior to the age of 18, assets in UGMA/UTMA accounts may be withdrawn by the custodian and used for circumstances that benefit the beneficiary. Therefore, it is allowable for the funds to be converted into an irrevocable education savings trust.


UTMA Conversions Are Allowable, Easy, and Affordable

Prior to the UTMA or UGMA beneficiary reaching the age of majority, the custodian of the account (usually the parent or grandparent) has the ability to transfer the custodian account assets into an irrevocable savings trust for the sole use of the beneficiary.  This is often done by parents when they suspect assets put aside for education-related expenses could be frittered away by young beneficiaries who currently have no intention to currently attend school or have money management problems.

The advantage of converting UGMA and UTMA accounts into an education savings trust are:

  1. Defer access to assets until future date(s) or event(s) if beneficiary does not attend school
  2. Education Distributions can be made directly to the University
  3. GPA performance incentives are available
  4. Graduation incentives available
  5. Prevent use of funds for unrelated activities
  6. Preserve or maximize FAFSA considerations
  7. Ability to issue distributions as loans
  8. Minimum GPA requirement can be elected
Best of Intentions

Custodians be cautioned:  It is not allowable for custodians to withdraw assets from a UGMA/UTMA account for purposes other than those benefiting the beneficiary. Liability issues could result, regardless of how the custodian feels about the beneficiary’s decision to not attend college.

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Tags: College Savings, UTMA

The Surfer and the UTMA (How It All Went Wrong For Two Caring Parents)

Posted by Ned Armand, President of Eastern Point Trust Company on Feb 29, 2016

An UGMA was depleted because of the ebb and flow of a career in surfing

When a passion for surfing led to unwarranted injuries, Skyler sought aid from his UGMA. Quickly, the funds were depleted, leaving his parents wishing that they had known about Kiss Trust.

Key Takeaways

When Dave and Brenda learned that Dave’s parents had left a fairly large bequest to their son, Skyler, they were delighted.  Skyler was their only child, and since Dave was an only child the amount inherited was easily enough to cover four years of college and the expenses associated with starting life after school.

Being devoted parents, Dave and Brenda put the money into an UGMA (Uniform Gift to Minor Account), where it would earn interest.  When Skyler turned 18, the account would transfer to him and he would have the money available to concentrate on his studies at college without having to get a job outside school.

Living in Florida, the whole family spent a lot of time at the beach, and Skyler learned at a young age that he had an affinity and a talent for surfing.  He won his first competition at the age of 11, and by the time he was 16 he had an entire wall full of trophies he had won from all across the East Coast, and even two from tougher competitions in California.  His parents were very proud, but always emphasized that surfing was a hobby and that academics came first.

As graduation time approached, Skyler began to bristle at his parents’ insistence on grades and studies over his beloved surfboard. He’d put in applications at several colleges, especially in California where he knew he’d have better access to big waves, and his good grades got him accepted in several.  However, when he turned 18 two months before graduation and learned about the UGMA which would be his, he abruptly decided that college could wait.  To his parents’ chagrin, he graduated, took the lump sum from the UGMA and headed for the West Coast, determined to make his living with his surfboard.

He soon learned that paying for your own food, lodging and expenses really cut into the infrequent winnings from competitions, and an ankle injury sidelined him for an entire season.  He started giving lessons to get regular money coming in, but he had trouble competing with older surfers who had years of experience and championships to recommend them to potential students. He kept having to tap into the UGMA funds, and within four years he had drained it.

Skyler was left with no savings, no real job experience, and his surfboard. He moved back home with Dave and Brenda, got a job at a sporting goods store selling the surf equipment he once thought would be his livelihood and started saving up for classes at community college.

This situation could have easily been prevented had Dave and Brenda taken the generous bequest and put it into a third-party managed trust, such as those offered byEastern Point Trust Company through Kiss Trust.  The trust allows for grantors to set requirements for distributions, such as graduating high school, going to college, and maintaining good grades among many other options. It also allows grantors to build in penalties for bad behavior, failure to complete school or even criminal activity or substance abuse.

Instead of Skyler being in his early 20s with very little money and a long road ahead of him to get to a successful life, a Kiss Trust would helped him strive for his work passion, instead of giving him an easy way out.

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Your Children May Be Endangered... By The Very UTMA Account Intended To Help Them (But, A Trust Can Help)

Posted by Ned Armand, President of Eastern Point Trust Company on Feb 24, 2016

Trust Funds with HEMS provision can deter or guide beneficiaries with substance abuse problems

You don't know it yet, but unfettered access to assets in a UGMA/UTMA custodial account for minor who could develop substance abuse issues can destroy a lifetime of savings.

Key Takeaways
  • A dependency issue can threaten to deplete assets in a custodial account.   
  • Parents and custodians of UTMA UGMA accounts can transfer funds to a supplemental needs trust or Health education maintenance and support trust if it is in the best interest of the beneficiary.                                    
  • Assets of supplemental needs trusts or (HEMS) health education maintenance and support trusts can use the funds in the account for rehabilitation programs for the beneficiary.

Substance Abuse Threatens UTMA Assets

A UTMA/UGMA custodial account is opened when children are still very young to transfer ownership and/or build wealth for later years, and well before any display of irresponsible behavior or substance abuse issues arise. When children become the legal age of 18, or in some states as old as 18, they gain unfettered access to potentially large sums of money. Parents who have witnessed irresponsible behavior are often deeply concerned about the assets in the custodial account being spent foolishly.

You Can Still Preserve The Funds

While parents can't go back in time to select better savings plans for their child, there are still some options available to them to help preserve the wealth in the account. Before adolescents turn (the age of majority) 18 or 21, parents have the ability to remove custodial assets so long as the intended use will benefit the beneficiary. If parents are concerned about the funds being spent recklessly, they can open a trust fund keeping the minor as the beneficiary. A trust fund would then allow the parents to set certain restrictions on how and when the assets are distributed. This is permissible since it is in the best interest of the beneficiary and the assets remain for the sole benefit of the youth.

Treatment Expenses Can Be 

If the beneficiary encounters drug or alcohol abuse issues before turning the age of majority for UTMA/UGMA’s, parents have the right to transfer the funds to a Supplemental Needs or Health Education Maintenance and Support Trust (HEMS). A trust with these provisions will allow the use of funds to help the adolescent with rehabilitation programs or other drug and alcohol control resources.

Know Your Options

The use of comprehensive trust and trustee services allow for parents to withhold assets for children until they demonstrate financial maturity or help in the treatment of substance abuse expenses if they encounter issues with drug and alcohol abuse during their formative years.  These services are now available easily and affordable with online trustees such as Kiss Trust.

Tips On How To Maximize The Effectiveness  Of Your Bad Behavior Penalty Elections

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Tags: Irrevocable Trust, UGMA, UTMA

True Story: Can a trust fund provide protection where an UTMA can't?

Posted by Ned Armand, President of Eastern Point Trust Company on Feb 19, 2016


A diagnosis of mental illness is always tough on both the patient and the close friends and family members.  While it may come as a relief to finally have professional recognition of a problem, the certification that the problem exists can be difficult to handle.  As advanced as our society has become, those with certain mental illnesses still find themselves stigmatized and forced to the fringes of human interaction.

When Allison’s daughter, Summer, was diagnosed with bipolar disorder at age 15, Allison knew that the young woman would need a lot of help and support to deal with the diagnosis, the treatment and the daily medication regimen needed to keep her on an even keel.  Unfortunately, as a single mother, Allison didn’t have as much time as she would have wanted to attend to her daughter’s needs and give her all the support necessary to protect her fragile psyche and keep at bay those who would seek to prey on her perceived vulnerability.

In her up cycles, Summer was a vivacious, articulate, engaging and charming young woman who could light up a room.  But when that cycle ended and she entered a down phase, she would spend hours at a time in bed or in a living room chair, lost in dark thoughts and tears.

As part of her divorce settlement, Allison had insisted that her ex-husband make regular payments into an UTMA, or Uniform Transfer to Minors Account, to pay for Summer’s college expenses.  He had done so faithfully, and Allison was relieved to know that at least she wouldn’t have the worry of coming up with tuition, fees and living expenses to deal with on top of everything else.  When she turned 18, the entire amount of the UTMA would be hers to do with as she chose. While that prospect gave Allison some pause, she knew that she’d raised her daughter well and trusted that she’d make good choices.

The first semester went great, with Summer getting acclimated to life in the city, making new friends and enjoying her classes.  As winter turned to spring, though, Summer moved off campus into an apartment with new “friends” on a hand shake arrangement and began to slide into a down cycle.  After disclosing to her new roommates, about her hefty UTMA account they devised a scheme to take advantage of her vulnerability convincing Summer that she owed unreasonable sums of money to them for past room and board.  And threatened to have her arrested if she did not make good on her debits immediately.

As the account rapidly dwindled Summer only became more depressed. Rather than seeing her therapist and getting her medication adjusted, Summer withdrew, her grades plummeted and she soon quit going to class. 

When Summer finally revealed the situation to her mother Allison, Allison was frantic and immediately contacted several trust companies in an attempt to preserve what was left of her daughters account, however it was too late.  Within a few short weeks, her “friends” had all but completely exhausted the money in Summer’s UTMA account and moved on.

Summer did manage to get through the hard times, and her faculty advisors, wracked with guilt at having not seen her plight, petitioned the art school for additional money to help her continue her schooling.  She managed to finish school, but all the money from the UTMA was gone, and she had a very difficult time supporting herself with her art alone after school, ending up in a series of “small” jobs which kept her bills paid but also kept her from pursuing her dream.

If Allison had chosen to put Summer’s college savings into a third-party managed education trust, such as those offered by Kiss Trust through Eastern Point Trust Company (rather than an UTMA), Summer’s false friends would never have been able to wreak the havoc they did.  With controlled distributions tied to things like successful course completions, finishing school and other milestones, a Kiss Trust encourages positive life choices.  The trust also allows the grantor to build in penalties such as suspension of benefits for bad behavior, failure at school, alcohol or drug abuse issues and the like.  A third-party managed trust is a far more secure way to handle the large (or even not so large) sums of money that can become available to a young person upon attaining their majority.


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Tags: Trust Fund, UGMA, UTMA

Kiss Trust

Creating a Trust
Has Never Been Easier

Kiss Trust is the only patented total trust solution in America. Kiss Trust Is a self-help trust creation tool with integrated trustee services and access to over 5,000 mutual funds, 1,000 ETFs and a brokerage account with stocks and bonds. Kiss Trust lets you create a powerful custom irrevocable trust without the expense and trouble of hiring an attorney.

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