Desoto, TX asked in Estate Planning for Texas

Q: Would a trust be the best way to help pay for college for my former exchange students who live in different countries?

I hosted three exchange students; Mozambique, Paraguay and Nigeria.

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1 Lawyer Answer
Terry Lynn Garrett
Terry Lynn Garrett
  • Estate Planning Lawyer
  • Austin, TX
  • Licensed in Texas

A: Creating a trust can be expensive.

You can create a Texas corporation online yourself using the documents on the Texas Secretary of State's website and register it as a not-for-profit corporation the purpose of which is promoting education. You must have three people on the board. You must keep records of annual meetings. You must submit an annual information report. Paying a lawyer to help you set up the documentation for the corporate by-laws and annual meetings and registering the corporation as a not-for-profit corporation with the IRS is probably less expensive than paying a lawyer to create a trust. In addition, a trust will be taxed on its earnings at compressed tax brackets, which could get expensive.

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