Tax Time

When we started these trust funds with the first one right after 9/11 I had no idea what to expect. People said that just putting money into a fund which grants them full access when they are of age was madness, since they could (theoretically) spend the money on anything they want. There was an additional argument that the trust funds aren’t effective for student aid, since they show up on aid forms, but we chose to push on anyways.

As it turns out all went well. There is almost $30,000 in the longest running fund and I got a call as the beneficiary was doing taxes with turbo tax and I felt very proud that he was taking such a lead in his financial life, and responsibility with his finances.

The most effective advice I received was not to just “give” money but to do something else that incents them to care about the outcome – from that I figured out the “match” concept which has done a good job of making everyone think carefully about the stocks being selected. I also give a list of 6 stocks and have them select from the list; that gives a wide range of potential options for them to consider but doesn’t assign them the task of basic research.

Of the 8 funds we will ultimately start up maybe not all of them will go so well. In the end it is up to them as adults how they want to live their lives and this trust fund experience is only a small part of what makes up their persona. My role is not to raise them but to be a positive financial influence in their life and show them the value of savings and accumulating wealth as well as the real-world fluctuation and risk that comes from equities markets and which cannot be avoided or mitigated.

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