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FAQs Page 10

FREQUENTLY ASKED QUESTIONS

What is considered a “personal expense?

Just remember “The Three F’s.” Food, Fun and Fashion.

What can the Trust pay for?

Remember M-O-M. Maintenance, Operation and Management. If M-O-M pertains to the Trust and its assets, it’s an authorized expense. It can also pay for the Education, Medical and Wellness of a Beneficiary. Also, all expenses for a miner, underaged or incapacitated beneficiary paid to a parent or legal guardian are authorized Trust expenses.

Can the Trust pay for jewelry or assets, such as gold?

The Trust can purchase (and own) any asset such as jewelry or gold.

Can the trust pay for marketing expenses pertaining to the trust?

Yes. Expenses relating to Trust Asset purchases or potential purchases are a trust expense.

Can the trust pay for seminar traveling and tuition?

For the beneficiary, yes. For a trustee the education must be related to the performance of the trustee’s duties for the management and operation of the Trust.

Can the trust pay for food or meals during traveling to seminars or market research in another city?

No. Food, unless strictly pertaining to trust business, is only a trust expense for an underaged child or incapacitated beneficiary.

Overview

Spendthrift Trust is a Non-Grantor Trust and as such the grantor has no management or administrative function in the trust and can NEVER be a Trustee, Compliance Overseer or Beneficiary.

Our spendthrift trusts are based on Contract Law and all actions must be in the form of a legal contract – Notarized Bills of Sale for all assets, Notarized Quit Claim Deeds for all real property, Witnessed Lease Agreements, Witnessed Assignment of Notes and other liabilities, etc.

All assets are legally sold to the spendthrift trust through a notarized Bill of Sale and witnessed Letter of Transfer. Real Property must also have a notarized Quit Claim Deed or other form of notarized deed. Ownership, control and management of the asset is given up.

Spendthrift Trust is an Irrevocable Trust and as such the document is irrevocable and sales of assets to the trust are also irrevocable. Assets could be sold from the trust, but the original owner can never “take back” the asset.

Personal expenses are not authorized expenses of the spendthrift trust.

Depreciation is not an authorized expense of the spendthrift trust.

Trustees must pay rent (lease) for the personal use of a spendthrift trust owned home and vehicle and a witnessed Lease Agreement must be drawn up.

Only Passive Income authorized by IRS Code Section 643 can be declared (on a witnessed declaration form) extraordinary dividends and allocated to the corpus to be taxed when distributed to a beneficiary.

All required tax returns must be filed annually or when required.

No Off-Shore accounts are authorized, and all banking must be done through a recognized US bank.

All trustees must have a US SSN or ITIN.

All Non-Passive (Business and Farm) Income must pass-through and be reported on a personal tax return and taxes paid currently. Declaration of Extraordinary Dividends are not authorized for Non-Passive Income.

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