Stuart A. Bronstein wrote:

- quote -

This is not correct. If state law allows the trust account
to be set up to age 21, then regardless of the age of
majority, the trustee would have control until age 21.

--
Alan
http://taxtopics.net

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Stuart A. Bronstein wrote:
- quote -

Stu: That may have been your point, but that was not what
you said in your reply to Chris Ballard's post. The
discussion at that point had to do with control of the
property inside the trust account, not who controlled SSA
payments. In addition, there are no SSA payments beyond age
18 for this child.

--
Alan
http://taxtopics.net

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glendale202-taxes[at]yahoo.com (A.G. Kalman) wrote:
- quote -

What I said is at the top of this post. That's exactly what
I said.

- quote -

Dick had asked how to handle the the money once received.
Irrespective of the law as it relates to UTMA trusts, I said
that I didn't think he could legally hold the money past his
son's 18th birthday. Technically a UTMA trust would not be
proper, either, but it's a reasonable thing to do (from a
legal standpoint) as long as it's set up for the kid to be
able to take control at age 18.

Can your parents take money from you, as an adult, and do
whatever they want with it as long as you get it back
eventually? Of course not. That's why legal ownership of
the SSA payments is important.

- quote -

I never implied I thought there would be, nor does it make
any difference to the legal issue involved.

Stu

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Stuart A. Bronstein wrote:
- quote -

Stu: That may have been your point, but that was not what you
said in your reply to Chris Ballard's post. The discussion at
that point had to do with control of the property inside the
trust account, not who controlled SSA payments. In addition,
there are no SSA payments beyond age 18 for this child.

--
Alan
http://taxtopics.net

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rdadams[at]smart.net (Dick Adams) wrote:
- quote -

As a parent I agree with you. And as a practical matter he
won't get the money from you before you are ready unless he
sues you - not likely to happen.

Stu

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:

- quote -

I wasn't talking about common sense, I was talking about the
law. Please don't confuse the two - they are not the same
thing.

Stu

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Stuart A. Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

Alas Stu, there is no way he gets the money at 18. I love
him too much to let that happen. Fortunately my brother
Michael and I are two of the three most devious persons on
the planet. Our Uncle John is so good he could be the Grand
Nexus of the Ferangi.

So I told my son that he could have up to $60 per month of
these funds, but to spend not to horde. Anytime he wants to
make a major purchase will we have a conversation. I also
told him that if I could, he would not have unfettered
access to the funds until he is 30, but the best I can do is
23! Though unreliable as hell, misinformation is a wonderful
internal control.

Susan and I see this money as his academic room and board.
Please note that my children get free tuition in the
University of Maryland System. Unfortunately I can not
adopt you if you are 16 or over (unless you are madly in
love with me and Susan approves).

Dick

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glendale202-taxes[at]yahoo.com (A.G. Kalman) wrote:
- quote -

My point was that the child is the payee of the social
security payments. It's his money from the word go. When
he turns 18 the parent loses legal ability to control the
child's property. So I can't see how a parent can legally
place the child's own money beyond the child's control for
three years after he turns 18.

Stu

Moderator:
What rational and loving parent would give an 18 year old
son $35,000? Raise your hand if you are stupid.

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Stuart A. Bronstein wrote:
- quote -

This is not correct. If state law allows the trust account
to be set up to age 21, then regardless of the age of
majority, the trustee would have control until age 21.

--
Alan
http://taxtopics.net

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"cballard[at]tyyni.net" <cballard[at]tyyni.net> wrote:
- quote -

Since the money is technically the property of the son
anyway, a parent only has legitimate control over it until
the kid is 18. So I would be reluctant to suggest that
transfer be delayed beyond that age.

Stu

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Stuart A. Bronstein wrote:
- quote -

If you go this route, you might check your state's law.
Most states have now switched over to the Uniform
*Transfers* to Minors Act ("UTMA"). One big difference
between UTMA and UGMA is that UTMA now lets you designate
the funds as not being available until age 21, but it needs
to be specified at the time that the account is initially
set up (and may need to appear in the title of the account).
This buys you an additional three years of control.

--Chris Ballard

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

withdrawn tax free if used for qualified education expenses.

http://www.cfnc.org/savings/cv0021.jsp

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

I'd tell the broker that the account should be listed as a
Uniform Gift (or transfer) to Minor's Act account. You will
have control, but he will have the right to automatically
take control back when he turns 18.

Stu

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

Like just about everything else in personal finance, you can
make this unbelievably complicated. My preference would be
to open a UGMA account with you/spouse as custodian and
handle the money for his benefit based on your judgement and
state regs. Money needed for short-term use (say, within a
few years) I would keep in a cash fund and longer-term (say,
7-10 years out) I would put in low cost investments such as
a no-load large cap index fund. My opinion is that a
custodian/guardian's first rule of investing is to first do
no harm. Further down the list is tax consequences.

-HW "Skip" Weldon
Columbia, SC

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Dick Adams wrote:

- quote -

Dick

Good luck! The SSA payments are his and do not go on your
return. If he has no other income, he does not need to file
a return. Otherwise, the usual rules on taxability of
Social Security payments apply.

There is no way that I know of to shelter this money. You
can deposit the checks and hold any securities in UTMA
accounts. However, when he turns 18, he automatically gains
control of these accounts.

Of course, he doesn't need to be told this! Nor with the
banks or brokerages say anything to him, as long as you
don't tell them to.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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As I previously noted, my son Joshua will be receiving SSA
payments until his 18th birthday. It is my intention to put
this money into no-load mutual funds and/or DRIP's. I am
willing to pay any taxes on this money in order to retain
control over the money so that it if it is not used for
college, he can't get to it until he turns 90. <g
I am not being an ogre about this. He knows of the money
and has been told he can have $60 a month of it by just
asking. He can also make major purchases if Susan agrees
and I believe he has not brow beaten her into agreement.

Is anyone familiar with how to structure this to minimize
taxation and retain control?

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