Legal Question in Wills and Trusts in New Jersey

Re: Setting up a scholarship fund

It sounds as though your Husband instructed in his will that you set up a Trust for your daughter's benefit. Setting up a trust is much like setting a up a corporation: you need to draft the appropriate documents, notify appropirate tax authorities, and file annual tax returns on behalf of the Trust.

I advise you to contact an attorney for help with this somewhat complicated matter. Feel free to contact my office for assistance.

Re: Setting up a scholarship fund

THERE ARE SEVERAL WAYS TO GO ABOUT IT, DEPENDING HOW YOUR HUSBAND'S REQUEST WAS MADE (BY A WILL OR JUST SOME EXPRESSION OF DESIRE). A 529 EDUCATION PLAN THROUGH THE BANK MAY BE ONE WAY. ANYONE CAN CONTRIBUTE TO IT, BUT THE CONTRIBUTIONS WILL NOT BE TAX DEDUCTIBLE, BUT THE INCOME WILL NOT BE SUBJECT TO TAX. IF THE REQUEST WAS THROUGH HIS WILL, A TRUST COULD BE CREATED. DID HE LEAVE ANY MONEY FOR THIS, OR WAS THIS JUST A SUGGESTION? YOU COULD CREATE A CHARITABLE EDUCATIONAL FUND TO WHICH CONTRIBUTIONS MIGHT BE TAX DEDUCTIBLE IF MORE THAN YOUR DAUGHTER WERE TO BE INVOLVED, AND INCOME WOULD NOT BE TAXABLE (THIS WOULD BE CONSIDERED AS AN EDUCTIONAL CHARITY AND IS SOMEWHAT COMPLICATED). YOU MIGHT JUST OPEN AN ACCOUNT IN THE NAME OF THE FUND, GET A TAX ID NUMBER FROM IRS AND USE IT ON THE ACCOUNT, BUT CONTRIBUTIONS MAY NOT BE TAX DEDUCTIBLE AND THE INCOME ON THE ACCOUNT WOULD BE TAXED. MORE INFORMATION IS NEEDED TO PROPERLY DIRECT YOU TO THE PROPER FORMAT.