Legal Question in Wills and Trusts in Nevada
Trust Services Marketed to Young People
We are exploring the concept of marketing trust fund services to minors.
The service would work like this:
1. An unfunded trust is opened in the name of a beneficiary (say John Doe)
2. Our company creates the trust and acts as the sole trustee
3. John Doe would receive instructions and tools to help him/her to fund the account from a variety of sources (parents, relatives, friends, bosses, etc.)
4. Contributors to the account would be able to set parameters for withdrawing the funds (i.e. age, marriage, grades, etc.)
5. Once allocated funds reach $500.00 a brokerage account is opened on behalf of the trust and money is invested in stocks, bonds, etc.
6. Taxes would be filed by our company on behalf of the trust and charged to the trust at minimal cost.
7. The beneficiary will have a level of control over investment decisions as prescribed by the various grantors (i.e full control, 50%, 10%, etc.). The grantor will choose the permitted investment vehicles (i.e. All, Stocks, Bonds, Mutual Funds, ETFS, etc.).
8. Once withdrawal parameters are confirmed, the beneficiary may withdrawal the funds.
We are not lawyers and do not have a license to practice law or investing.
Is what we are considering legal?
1 Answer from Attorneys
Re: Trust Services Marketed to Young People
In a word, no. You are acting as a principal and fiduciary (banking, security laws, and other limitations of Investment company Act also apply.) You would need licensing, bonding, legal background checks and state and federal approval for operating a national (interstate) banking/securtity operation. Saying that you are ONLY acting as an agent would not be correct. You would be creating legal intervivos or testamentary trusts and would trip over many legal issues. Do something else.
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