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