Growing and protecting your assets for your heirs has never been more simple and accessible as it is now, with Kiss Trust.
- Look for all-in-one tools that provide a family and friends donation portal
- Open accounts with minors listed as beneficiaries
- Maintain control of funds with an irrevocable trust
Safeguard Family Donations
Grandpa Joe and Grandma Jane did very well in life and saved a lot of money. They now wish to bestow their fortune upon their grandchildren in the form of annual gifts. With the ability to gift up to $14,000 per child tax free annually, they give a total of $70,000 each year to their five grandchildren by way of personal checks passed to their sons, Tom and Peter.
It is estimated that by age 18, each grandchild could have over half a million dollars in their accounts thanks to long-term compounded growth. At the end of each year, Grandma Jane takes out her checkbook to write a check and hesitates, wondering what actually happens to the money she gives. Does it get deposited into a savings account per their wishes? Or is it cashed and spent frivolously on toys, clothes and other luxuries? What if, during especially tight months, the check is cashed and used for groceries or even household bills?
While not every grandparent has the resources to be as generous as Joe and Jane, many enjoy the role of benefactor and love gifting money to their grandchildren. Parents should look for all-in-one affordable tools that offer a “friends and family” portal that provides reassurance to donors about where their gifted money is going.
Avoid Common Mistakes
Parents often open UTMA (Uniform Transfer to Minors Act) or UGMA (Uniform Gift to Minor Act) accounts for their children that list parents as custodians of an account belonging to a minor, making the child the owner, rather than the beneficiary. This significant difference means that by age 18, the child has access to all of the money, leaving the parent with no control over how the money is spent. UTMA and UGMA accounts give parents no control over the distribution of the money saved.
Affordable all-in-one plans that offer irrevocable trusts listing children as beneficiaries, rather than owners, are preferred over either UTMA or UGMA accounts. This packaged savings, investment, and trust solution enables parents to determine how money is distributed to safeguard the child’s future assets. For example, for children who elect to not attend college, parents can reallocate distribution elections to prevent having the beneficiary acquiring a lump sum windfall and spend the entire amount quickly and unwisely.
Contributions With Easy Access
The last thing a parent wants is to make it difficult for donors to make a contribution to a trust. An all-in-one savings trust with a friends and family portal can eliminate uncertainty and establish a schedule of gifting with a one-time gift or ongoing contribution. Look for a feature that is confidential and secure. Spare Grandma Jane the worry over the use of the money she and Grandpa Joe gift each year by opening an all-in-one savings trust.