How business, doctors and journalists prey on your food anxieties I

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Trusts can keep others from knowing
what you have while you're alive,
<strong>and</strong> whom you leave it to when you die .
retired professor Hawley . It makes a lot of seuse for older
people who \could like to Ieaw charitable bequests <strong>and</strong>
novvhold appreciated securities or real estate thcN'd deariv
love to cash in to btp' bonds for income . If thee do it in
their own name, capital gains taxes vv'ill take a big bite <strong>and</strong>
leave them that much less to liv-c on .
You transfer assets to a trust that nan :es vou as income
beneficiarv <strong>and</strong> one or more charities as rentainder benct]-
ciaries . The trustee, who could be v1ou, sells the assets with
no capital gain tax consequences, <strong>and</strong> plows the proceeds
into income-producing investmen[s . When vnu die, [Ite
principal goes to the charities .
You get an immediate income tax deduction equal to
the remainder interest you are gi\ing away . That's catcutated
from oour expected lifcspan <strong>and</strong> the lecel of the
income parout you Will be taking . Here's the beauty part :
You get a full exemption from capital gain taxes even
though the income interest you are caning out tixrourself
may represent a large share of the trust's total value .
Then there's the kir!die tr-iut, used to timd vour children's
college tuition . The tax benetit, until the childis 14,
is fairlv small,since all but S 1,300 of income earued by the
trust is taxed at vour rate .After that age all the i ncome goes
on the child's return .
This kind of trust competes nith dle simpler e .\pedient
of opening a Uniform Gifts to hlinors Act account for the
child . With au eGt.tA, howe\er, the kid gets the moner, no
strings attached, when he hits ?1 (18 in some stnres) .
There's nothing to stop him from using it to join a
commune, bua a tanc .~ car or indulge a drug habit. With a
n'ust document Vou can specit ;'that if the monevisn't used
for tuition it goes [o charitv .
What ifv'ourdiild alreadr has a pile of moner in an t'cst.,L
<strong>and</strong> cou vcant to lock it uu in a n-ust? For novv .Vou're stuck .
l4hen lie rraches majoritr, cou can ask him to coluntarily
sign du asscts orer to a u'ust .
Some parents vv°ant a trust to trceze monabevond the
age of majorinto age 30 . If that's vchat cou vvant,
uu either havc to tbrgo the $ 10,000 gift tax exdtision or
;-ive the child a 3tl-davvvindovvofoppornminto get at tLe
moner as soon-as lie reaches adulthood . dssumine lie cmi
resist the tempmtion for that inten-al, the trust can close
aeain for anv numbcr of vears .
Let's sae you urc reada to open a trust . Now mhaN ifvott
need aNen, simple knd of trust <strong>and</strong> ha\'e no famile
complications (like a divorce or stepchildren), vou might
tny to draft the trust document v'ourself . Aolo Press in
Berke,ev' . Calif. publishcs a book f .Llrske Your Ownt Lirintl
Trust. S20 ) <strong>and</strong> a computer program ( LirisLa Trur .'vlaker
2 .0, 5801 with sample trusts to copv, . Other do-it-vourself
hooics'. <strong>How</strong> to Aroid Pro6ate (HarpcrCollins, S25 ) <strong>and</strong>
The Nnn-Lrnrvrrs Lfning Trust Kit jlpha Publications of
America . S 1~ 1
. <strong>How</strong>ever, most people aould be better oftpaving the 51,000 to 53,000 it vvill take to ltav'e a lavv1er
draft the papers .
With a Iiring ttltst, v-ou'11 need to transfer assets into it . A
general statement on a trust schedtle t'egarding "pcrsonal
property <strong>and</strong> household tilruishings" Wi11 suffice to transfer
items like clothes, books <strong>and</strong> je«eln . For things witit
title documenrs-eal estate, bank accounts, securitiosqotrll
hav'e to prep .ve nesc ovvnership papers, explains
Ideal vehicle for holding title
to real estate outside your home state :
a revocable living trust .
172 Porbes RAugust 14, 1995
http://legacy.library.ucsf.edu/tid/agf97d00/pdf