Anyone use a KissTrust for their child instead of a 529?
Would like to hear anyones experiences with a KissTrust. I'm looking into investment plans to help pay for my babies future education and this seems like a really good option.
Is there any reason you want to use a trust instead of a 529 plan? With a 529 plan your distributions are tax free if used for qualified education expenses. Can the trust match that? No...the trust has more flexibility (use it for whatever you want) and it looks like it isn't included in the financial aid calculation which is a plus.
Have you considered the fees and investment options? Based on what investment method you pick they have a fee schedule that will impact your return. I wouldn't go with option 1, and the rest charge more than what I would tolerate.
Trusts sound sexy and elitist. 529s are rather boring. I think they downplay the tax issues...some of my friends have trusts and they are a nightmare at tax time (although if you saw their holdings it would be a nightmare worth having).
Here's the clincher for me. Let's say you have a brand new baby who is 18 years away from college. You have to go through NINE different sessions of Congress until then. What is your feeling towards Washington, spending, entitlements, the deficit, and taxes? You can't predict the future, but I am willing to bet taxes can only go up. With 18 years of changes to the tax code, trust taxation will get more complicated, and when you do distribute your earnings for college you will pay capital gains taxes at the 2030 tax rates!! Yes, the 529 plan could get hit too, but given the choices I feel that is less likely to happen.
My dad bought savings bonds. I had a friend whose dad bought a house and gold coins and sold the house the year he went to college, and then sold the coins as needed. Another just kept everything in cash. Really it is up to you and what you are comfortable with. There is more than one road to Dublin.
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