Planning Your Retirement

In-trust for Account:

In-trust accounts are useful for estate planning purpose especially when parents or grandparents want to leave assets for their kids or grandkids who are minor.

What are Intrust for Accounts?

In-trust for accounts are open accounts which can be opened for children who are minors.

Can there be joint owners in In-trust for account?

Yes, you can open an In-trust for account with a joint ownership.

What if the beneficiary named in In-trust for account does not behave well?

You have full control over the account until the child turns 18. You also have an option to change the ownership of the account before the child turns 18. But once the child turns 18 you loose control over the account.

Is there any tax advantage if I open an In-trust for account?

Yes, most of the time owner is in a high marginal tax rate and beneficiary do not have any income. This makes ITF (Intrust for) account attractive as capital gains inside the portfolio are taxed according to MTR of beneficiary. Moreover, any income and interest earned in the portfolio is taxed to the owner.

How are the assets distributed if the account owners die premature?

The assets are distributed thru estate.

How is the beneficiary taxed at the time he/she acquires the assets?

The capital gain is triggered at that time. FMV (Fair market value) less book value (Initial investment) = Gain and 50% of gain is taxed.