davec@dciem.UUCP (Dave Cote) (09/01/83)
I would also be interested in learning more about ways of 'giving' dependents money while at the same time avoiding taxes on that money. I have often seen the phrases "gift to minors", "Clifford Trusts", and "custodian accounts" thrown around, but no one ever seems to take the time to explain them in detail. Are they so complicated to orchestrate their setting up should be left to CPAs or lawyers? Any info would be appreciated.
silver@csu-cs.UUCP (09/10/83)
I'm no expert but I know from recent experience that a gift under the UGtMA* is trivial to make. You just fill out a little card and open the account or whatever. The money then belongs legally to the minor but as guardian you can use it "for the benefit of the minor" by claiming an emergency (and possibly have to answer to a court later if the minor demands an accounting upon reaching majority). Meanwhile, you DO pay taxes on the money that goes into the gift (whenever you earn it), but the interest on it (which can be substantial over time) is in the minor's name, ergo tax free (probably). The preceding information is what I learned by talking to an account specialist at a local savings bank. It might be wrong, and certainly doesn't address all the possible options. I suggest you do the same -- talk to a specialist wherever you want to put the money. Alan Silverstein, Hewlett-Packard Fort Collins Systems Division, Colorado ucbvax!hplabs!hpfcla!ajs, 303-226-3800 x3053, N 40 31'31" W 105 00'43" *UGtMA == Uniform Gift to Minors Act