Trust fund and FA

kmccrindle
Thu, 23 Jul 2009 16:49:55 +0000

OP - Regarding the lump sum payments that could spike her income at an inopportune FA time (and yet not be sufficient to maintain the contributon…) Has your sister set up some kind of incorporation of her business as an artist? Or would that be too expensive and would she be unlikely to manage the paperwork/remittances etc.? Just a thought. If she were paying herself a fixed salary, and then ensuring the balance of pretax money were funding future salary, cost of goods/material, etc., it seems like she would have more control to accurately reflect her status. When you are a small business, your business equity is only considered under certain circumstances (eg +100 employees) on FAFSA. Sometimes under CSS form they may request a corp tax return and share/ownership/valuation info. This might all be overkill, but in an artist’s life, you never know when that $100,000 k + commission might turn up…and it can skew things a great deal.

On the matter of the trust, I didn’t see anyone ask what the originators of the trust would want. If your parents are alive, has there been a conversation? If not, was a will explicit about what was important to them? Indeed, it needs to be protected in a way to optimize the benefit for the child. Beyond that, it’s really about determining and meeting what the giver of the gift intended, to my mind.
Best wishes,
K