Legal Question in Wills and Trusts in California

Is There a Trust Vehicle for Collecting and Investing Contributions for a Family

Every 5 years, my large family (over 100 members and growing) has a family reunion in some resort location. These take a lot of planning and a lot of money to organize. In the past, we've just selected one of the elders in the family to be the banker and setup a simple, very low interest bank account to accumulate and hold the funds collected from all family members until we're ready to use them for reunion expenses. Since a lot of money is involved, but only for a limited period, we were wondering if there was some tax entity we could form for the collection and investment of these funds which could produce a better rate of return than a simple bank account. Obviously, we'd want to have an entity with the least tax obligations. Appreciate any thoughts.


Asked on 7/26/00, 8:19 pm

1 Answer from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: Is There a Trust Vehicle for Collecting and Investing Contributions for a Fa

If there is income on the account the trust is going to have tax liability and may have to file its own tax return. It may be more trouble and expense than it is worth. It might be better to have an understanding that the additional tax liability the elder has can be paid out of the fund. Have the account in the name of a family member who has a low tax rate to begin with.

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Answered on 9/13/00, 3:32 am


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