Reply to financial aid at our Big3 is a farce

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I have a friend/family member (being vague on this) whose kid was admitted to a Big3 for high school. HHI $450K-500K+, two homes worth 2 million+ (one rented out), country club membership, one tuition. I am 100% sure the estimate of their income is correct. They asked for and received 50% aid. I'm honestly shocked and surprised.  We pinch our pennies for this school and even donate beyond.  We make less money than they do. I never even thought 
of asking for aid. This kid is not a minority, very smart but no special hooks.  I'm just sort of floored. I feel like broadcasting this to the school. It feels like a gut punch. 
This is not a troll post or made-up post. [/quote]

I can believe it.  Many, many millionaires take advantage of the tax laws in the US that most people don't know about.  That is how Donald Trump has gone bankrupt four times and still has the money and assets he has.  It's how the current governor of Virginia and his partners paid taxes on salaries of less than $200,000 while earning millions from the company they founded.  It's called a "Family Charitable Trust" or "Foundation" and anybody with money can avoid paying their fair share of income taxes by having this type fund.  The Trust/Foundation invests in high yield investments to increase its worth.  The Trust/Foundation is NOT TAXED.

Here' how it works.  Rather than receiving a paycheck from their employer, their full salary without withholding and any stock or bond distribution they receive is sent directly to the Trust.  The Trust then purchases a million dollar home, pays the property taxes, upkeep, etc., purchases a vehicle or two and pays all auto expenses, provides vacation homes, etc.  The Trust holds all the assets.  The income earner serves as Chairmen of the Board of the Trust, his/her spouse and members of their family serve as members of the Board overseeing the trust and are compensated accordingly.  The children who serve on the Board have the balance of their tuition paid as part of their salary as well as other school expenses they incur.  The distribution to the Board members is usually taxable.

The Trust must annually distribute income.  That's why you see professional athletes and others distributing backpacks and school supplies in August and toys to needy children at Christmas. The money comes from their Trusts.  If you watch Public Television, you will see programs funded by Private and Family Trusts and Foundations.

So that is how some millionaire children are able to receive financial aid from schools.  Financial aid is based on your annual income, assets, etc.  Since all your assets are not in your name, you own nothing and owe very little and that is how financial aid is calculated.

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The description on foundations and charitable trusts makes Wikipedia look like a Masters in Economics from University of Chicago. No, that’s not how charitable trusts, foundations and DAFs work.  The point of the trust is that you can take income that would otherwise be taxable (like a windfall or capital gain from a business sale or exiting an appreciated position) and put the money into the trust. [b]The money must stay in the trust can cannot be taken out. [/b]The trust must use the money to make contributions to bona fide charities and cannot buy properties or any of the other nonsense imputed above. Depending on the specific vehicle, it may be required that a certain % of the assets are contributed on an annual basis.

There are certainly many ways that wealthy people avoid paying taxes, but what the PP spewed is gibberish. [/quote]

This doesn't sound right, it depends on how they trust is written.  I have family members with a trust that I help them manage and it states circumstances in which money is or can be taken out.[/quote]

Keep up. This is about charitable trusts/foundations. Not regular family trusts. [/quote]

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