Typically, high priced attorneys, financial advisors working on a fee or “a la carte” basis and tax attorneys are just a few of the professionals that a person needs to open a traditional trust. It’s expensive, it takes a lot of time to set up, and unless you have a large sum of money to place in the trust it may not be worth your time. Since most states require that an attorney draft the trust documents, the attorney fees alone may cost $2,000 or more, a lot of money to pay in an attempt to give your money away.
Thanks to the KISS Trust, there is new way to set up a trust for those who don’t have a large amount to place in a traditional trust.
What is a Trust?:
You’ve heard of a trust fund but you don’t know what it is and since you always thought it was out of your price range, you never bothered to learn. A trust fund is a will with a lot more stipulations. Trust funds are often set up by the wealthy with the idea that the interest and dividends earned would allow the trust to operate off the investment income making it something that spans generations.
For example, if you were wealthy enough to start a traditional trust fund, you might put $1 million into it and have the bank or wealth manager invest that money into bonds and stocks that would pay 7% interest (historically) each year. That $70,000 could be used to give your three children a steady income of $20,000 each and the other $10,000 reinvested so the trust continues to grow allowing your grandchildren to receive a payout.
One advantage to a trust is that you decide the particulars. Maybe your children can draw from the trust to pay for college but if they choose not to pursue an education past high school, they can’t draw from it until they’re 40 years old or medically disabled at any age. You get to decide. If you leave money behind for your kids in a savings account, your kids will get to make all the decisions.
The Cost of a Trust:
The Kiss Trust:
The Kiss trust solves this problem. You can start a trust for anybody you would like with a minimum investment of $1,000 or $50 if you commit to monthly contributions. The cost to set it up is only $199 and you can set up additional trusts for other people at a cost of only $99. This fee includes all legal documents prepared by an attorney. One conservative estimate shows that if you contribute $1000 initially at birth and $100 every year for 18 years, by the time the child reaches 65%, the trust could grow to be worth $315,000, thanks to compounding.
With the Kiss Trust you can even place a stipulation in the documents that if the person receiving the trust has children, a certain amount will be pulled from the existing trust to set up trusts for each child, and then their children, and so on. All funds are held by Fidelity Investments as well as other well-known brokerages so the chances of the fund going bankrupt are quite slim.
However, you do need to remember that every investment has risks so careful evaluation is a must.