Education Trust

Education Trust

Hi, I'm looking for a model for my son's education trust. we need items like how much to allow per month for different items like school, living expenses, transportation, etc. I'm unable to open your form.


Sorry about the form, I'll have our computer guru look into it. Before you set up a trust for your son's education, consider ALL the options:

  • 529 Plan - college savings plans are simple, no cost and some good programs are available. You can front load the gifts at $55,000 in one year (trusts use Crummey powers and for one child its $11,000 per person). But be careful, 529 plans are not always the best option, especially for those who are well to do.
  • Coverdell Savings - for pre-college costs.
  • Keep the money yourself -- depends on the risks of suits, your net worth, the likelihood you may need funds, etc.
  • Trust - the most flexible and secure option, but the most costly to set up and implement. Key point most overlook -- if you use a trust you can integrate the child's trust into a comprehensive asset protection, estate, income tax and related plan for your entire family.

Now for your questions -- its usually a mistake to draft a trust with specific amounts allowed for living expenses, etc. No one knows what the future holds. Too many "what if's". Much better approach -- use broader and more flexible standards. Most if not all children's trusts are irrevocable (can't change) so you need flexibility.

See Shenkman "Complete Book of Trusts" 3rd ed. from John Wiley for detailed discussion of children's trusts.

Finally, before you jump consider the impact of each possible approach on financial assistance programs.

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