"Sgt.Sausage" <nobody[at]nowhere.com> writes:

- quote -

See my previous post re: donor-advised charitable funds - the
money (or that portion) has to go to real charities, but the
successors get the opportunity to participate in the decision
making as to where the money goes.

- quote -

This is the time to start!



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"Elizabeth Richardson" <erichktn[at]worldnet.att.net> writes:

- quote -

FWIW, I'm more inclined to pay for decendent's educations
han for their retirement. I could also see funding some
kind of disability insurance, but wouldn't worry too much
about their retirements.

Another thing worth considering is putting some of the
money into something like a donor-advised charitable gift
fund and giving the group of descendents (or one of them
as a spokesperson) the power to make those suggestions.
ie: <http://www.charitablegift.org/successor_options.shtml

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- quote -

have you given thought to any of the following:

funding a college scholarship at a nearby institution?
donating $$ to science/ research?
creating a charitable foundation yourself?

one example might be look at nieces and nephews, and what they are
"interested" in, then create a scholarship based on interests. In this
case you would be paying for family's education (as opposed to
retirement), and the standards to reach "higher education" might help
weed out the slackers.

But this assumes someone needs a college education to get ahead, and I
know that is not true in all parts of the country- helps, but is not
the best predictor.

Gil Faver wrote:

- quote -

Does this make your trip tax deductible?

-Will

- quote -

yes, it sure does. I just got back from three weeks in Italy, thinking
about just what to do with my money. Unfortunately, I came to no firm
conclusions, so I am likely to return to Italy to continue the thought
process.

Sgt.Sausage wrote:
- quote -

Hmm, that would be the last thing I'd think of. The desire to "keep it
in the family" even if not direct decendents seems to be a natural
impulse to me. Far be it for me to judge your motives. Given your ages,
I'd just continue to think about your goals and the possible unintended
consequences. As another poster suggested,. knowing money is coming may
have an impact on one's motivation to work. If I knew I had to make it
to 62 to get a windfall, and not save for retirement beyond that, I
might just check out right now.
But as I has to plan when I wrote my will after the birth of my child, I
had to think about how to divide any money on the chance I take my wife
and kid with me in an accident. I included enough relatives that the
impact to any one would be minimal. Either way, this exercise gets you
thinking.
JOE

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:6IOYg.72912$QZ1.30789[at]bgtnsc04-news.ops.worldnet.att.net...


- quote -

I see your point ...

- quote -

I am, for some unknown reason (any psychoanalysts out there?<grin> )
hooked on the idea of somehow "keeping it in the family". This is totally
irrational -- we'll both (wife and I) be long dead and gone, so what does
it matter?

Maybe some sort of compromise is in order -- part for charity,
part for the family. I don't feel any sort of personal "debt to society"
that needs paying back, nor do I feel particularly charitable ... but
wanting to "keep it in the family" somehow doesn't sit right either ...
Sort of wrong, but not really "wrong" per se -- just doesn't seem
right.

I need more thinking on this one.

***

This is all, right now "pie-in-the-sky" -- I'm 37 years old and have
(hopefully) many decades to consider how this will be done. We're
due for an update on the will, which was last done over 10 years
ago, and I've really been thinking about what to do with the
nest-egg. 10 years ago we weren't in a position to worry about
such things. We didn't have much of a nest-egg at the time.

It is, after all, quite possible that it will be entirely wiped out
before we even get to implement this idea and in that case,
it won't matter.

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:ab0a7$452e9686$42a1e606$22964[at]FUSE.NET...
- quote -

Devil's Advocate here. You believe you're a better person for having
provided for your own education. Do you believe you're a better person for
providing for your own retirement? Do you believe your sibling's offspring
would appreciate the value of doing so also?

Have you considered setting up this fund for those who start life a whole
lot less fortunate? I'm not suggesting that you fund several generations of
"slackers", but there are kids who could/would contribute to society with
just a little leg up. This is certainly not an idea of handing them money.
Would your community benefit from having a "foundation" that would provide
scholarships for trade schools, for instance?

Elizabeth Richardson

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:xyZXg.6864$Lv3.4289[at]newsread1.news.pas.earthlink.net...

(2) a suitably qualified,
- quote -

That sounds good, but actually some banks will put the assets under
management disproportionately into their own in-house financial products,
with poor performance in the long run. Losses that occur because of bad
investment decisions on the part of the bank employees are over and above
the 1 percent (or more) of assets taken out year after year. Not all banks
are unscrupulous, but finding a good one can be risky business.

One challenge with the "dynasty trust" is who will be
declared co-trustees and when. Managing the investment of a
large amount of assets is of course a large responsibility.
A bank and some descendants are often chosen as co-trustees.
Pros of the bank being a co-trustee: (1) Short of a nuclear
holocaust, the bank (or its successor bank if, say, a merger
occurs) will always be there; (2) a suitably qualified,
trust-experienced individual or individuals (employees of
the bank) will participate in decision-making; (3) banks
offer some impartiality to family squabbles. Cons: Banks
will take on the order of 1% of the assets' value each year
for fees for their services as co-trustees. As for
descendants being co-trustees: Too many, and it may be hard
to gain consensus on an important investment decision. Also,
conflicts of interest occur with descendants being
co-trustees, since they're managing the trust's assets so
that the assets last--that is, for growth--but also in part
for their own income.

I recall general references to the Joseph Kennedy children,
grandchildren et seq. drawing from some sort of a family
trust. It must technically be a "dynasty trust," as you
found. I believe I read this alleged Kennedy trust is at
least in part currently managed by one of the grandchildren
(the Chicagoan, who stays out of the news). But the elder
Kennedy knew he was going to have a guzillion direct
descendants, and he raised his children with a certain ethic
and familial glue. It does not sound like you are going to
have this. ISTM your wife and you are left having to have a
lot more faith that the trustees of your assets will operate
in the interests of your descendants.

I trust you have also heard of charitable trusts that can be
set up to initially pay income to charities but then
ultimately dissolve and pass to, say, grandchildren or I
guess grandnieces/nephews.

You also do not have much idea whether your nieces and
nephews will even have children. So you do need to come up
with alternate beneficiaries.

I am sure you are en route to an estate attorney and are
wisely trying to prepare a little in advance. Good luck.

Sgt.Sausage wrote:
- quote -

How did funding your own education make you better?

- quote -

Actually, I think that providing for retirement would still encourage a
slacker attitude. If I knew that I had my retirement guaranteed, I
wouldn't be striving to save money and work hard. I'd be spending all
my money now, probably running up a credit card debt that I can pay off
in retirement.

Sgt.Sausage wrote:
- quote -

To make trust perpetual, maybe add a stipulation that someone needs to
add in 1% (or 10%?) of trust's value at age 30 by retirement... then
they could also extend trust to new heirs as needed if they contribute
this amount (so if portfolio is worth $5 million at age 30, that person
would need to contribute $500,000 to overall amount before they retire
and start collecting from it). I think most people would collect more
than they contribute... but the addition of new funds may allow the
trust to be invested "more aggressively".

I agree with you as well- kids should fund their own education.

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:xd2dnet56qlTJbPYnZ2dnUVZ_vGdnZ2d[at]comcast.com...
- quote -

On the "slacker" issue -- actuallly, no. Ideally, I'd like to
have the trust provide for retirement only, and not to guarantee
a slacker-trust-fund-baby-I-don't-have-to-work-a-day-in-my-life
attitude.

My wife's on your side and thinks that, in addition to providing
for retirement, it should fund education. I disagree. I funded my
own education and am much the better for having done it myself.

In no circumstance do I want to give away "free" money so
a slacker decendent can free-ride on the trust. That ain't the
point of what I want to do.

Sgt.Sausage wrote:
- quote -

My only trust experience is the one I set up for my child at birth. The
purpose was to get money out of my estate, firuging that as time went on
there'd be a chance of exceeding the exemption and having estate taxes.
So, now I'm able to gift the trust $24K/year, and separate trusts (all
set up at the same time, but different entities) own our life insurance.
The caution that I'd give you is that gains in a trust quickly get taxed
at very high rates. Go to IRS.gov and look for Form 1041, the 1040 for
trusts. The point of the taxation is that trusts aren't meant to avoid
income tax, per se, but allow for current gifting and probate avoidance.
The trust I have is irrevocable and distributes any gains each year to
the child to be taxed at the individual (not trust) rate.
With enough offspring on your list, you may be able to have the trust
distribute those gains/dividends to pay for college or just as a general
distribution from the trust. If you plan to set up something permanant,
just consider the exact 'rules' you want followed. You want the
decendents to benefit, that's great, but do you want a generation of
lazy slackers in 60 years? (not suggesting your genes are slacker
material). I'm just suggesting that my view is that providing an
education and seed money to start a business may be a priority. You want
the trust to pay only at retirement? I suppose you can do that, too.
Just a thought.
JOE

The term is called "dynasty trust".
A "trust" is a legal entity which is not person, but can own assets.
It has a manager(s) and benificery(ies).
[ A corporation is a special type of trust. ]

Many governments limit the duration of a family trust to
a century or one generation past living generations, so they can
eventually tax the assets. But if you google the term dynasty
trust there are lawyers claim that one can exceed these
limits based on new laws or some other scheme. I'm under the
impression that some rich families make a new trust when the
old one goes out of existance, but that requires the agreement
of the beneficeries.

This quest came up when a guy who wanted to freeze themselves
near death and control and invest their assets until some future
resurection time.

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:e3d26$452eaca4$42a1e606$6694[at]FUSE.NET...
- quote -

more from
http://www.oshins.com/saletoadefecti...erpetuity.html


South Dakota is one of only six states with no rule against perpetuities. If
a dynasty trust is set up in South Dakota, it can theoretically last forever
without any estate, gift or generation-skipping transfer taxes! South Dakota
has traditionally been the jurisdiction of choice for these trusts, not only
because it has no rule against perpetuities, but also because it has no
state income tax.

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:e3d26$452eaca4$42a1e606$6694[at]FUSE.NET...
- quote -


http://www.savewealth.com/planning/estate/dynasty/

and more can be found by googling.

I just recalled "the rule against perpetuities" which says you cannot tie up
your money forever. It is limited to a "life in being" plus 21 years. Of
course, the "life in being" can be a set of lives, of people currently
living, so if your first choice dies early, your trust need not suffer
unduly. I would pick all family members currently living, especially the 2
year olds. But, that plus 21 years brings you out to about 100 years, not
beyond. For that, you would be at the mercy of some future trustee deciding
your plan was a good one, and creating another such plan to get the next 100
years in.
- quote -

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:25377$452eab41$42a1e606$6210[at]FUSE.NET...
- quote -

I've thought along those lines, but now I think I should try to spend more
of my own money. There will still be plenty left for the family.

But, I will be watching this thread with interest.

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:ab0a7$452e9686$42a1e606$22964[at]FUSE.NET...

- quote -

I've done a bit of googling and it looks like what I'm after is
called a "Dynasty Trust".

Anyone ever dealt with one of these?

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:eOxXg.57242$QZ1.26922[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -


I'm sure there are some current Rockefellers that the old man,
were he alive today, wouldn't LIKE either -- but somehow he
set it up so that they've all got money.

I ain't comparing my small mound of beans to the Rockefeller
mountain of beans -- but I'd like to setup something for future
generations ... whether I actually like them or not.