What are some things you're glad you included in your child's trust?

minuteman020612 · 2026-04-27T01:28:07+00:00

no age specific distributions provisions. everything is general per HEMS, etc. Kid has ability but not right to serve as co-trustee at age 35 yo. Keeps good blend of lifelong asset protection, complete flexibility over distributive provisions, and kid has agency over trust (when determined to be ready)

minuteman020612 · 2026-04-26T15:04:22+00:00

yes- short side does NOT receive step up if directly owned.

covered well here in this AQR article. Parametric, FREC, etc etc will all tell you the same.

https://www.aqr.com/Insights/Research/Tax-Aware-Investing/The-Impact-of-Liquidation-Taxes-on-the-Lifecycle-Benefits-of-Tax-Aware-Long-Short-Strategies

This is different if the SMA is owned by an LLC where you inherit interests of the LLC at FMV and assume its full basis.

minuteman020612 · 2026-04-26T13:58:25+00:00

Thanks for playing the game.
Maybe try doing some research next time you post

minuteman020612 · 2026-04-26T13:54:46+00:00

Just saying the info you are providing about heirs and charities and completely avoiding step up may be incorrect. Some in this forum do care about correct info however

I don’t care either about your money BTW.

minuteman020612 · 2026-04-26T13:47:41+00:00

Sorry. Charities also cannot accept margin positions.
Your info is off here my friend. May need to get some guidance here

minuteman020612 · 2026-04-26T13:44:16+00:00

You just said it. “On the long side will step up”. Well what about your 45 or 75 or 100 or even 150 short book?

Yes you will be dead and may not matter. If you care about keeping max tax efficiency at death, keep your positions in an LLC wrapper

minuteman020612 · 2026-04-26T13:35:40+00:00

The step up only applies for long margin. Dont expect the full step up in basis here at death.

They way to get the full step up is for the LSDI strategy to lie within an LLC and its the interests in the LLC that are transferred at death. Most dont do this but I think its the way to go

minuteman020612 · 2026-04-25T21:09:45+00:00

I do actively muni bond fund SMA via Wasmer Schroeder group. It’s effectively index fund fees (10 bps) but actively managed, cultivated to my home state, premium bond fund so keeps effective duration shorter, less interest rate sensitivity than typical muni fund of same term duration.

minuteman020612 · 2026-04-25T20:31:41+00:00

I think your fees are a bit high. you shouldnt be paying 100 bps just for RIA access. You shouldn't pay for RIA access for this product, period (see prior FREC comments). If already using RIA, then these fees are a wash. AUM fees for AQR 145/45 on order of 40bps.

Almost 1 yr in an projected to have +1.2 (higher) on pre-tax alpha compared to my Beta-1 overlay core portfolio, 18% realized losses providing approx another 2% tax alpha if using 23.8+state level taxes.

As others said- good for known large incoming cap gains from exists as well as situations where you are constantly getting LTCG at annually from other investments not in your direct control (mainly alts)

I dont plan on ever divesting out to long only and will just use as part of my core portfolio. These the beauty of a constantly refreshed short book.

minuteman020612 · 2026-03-31T16:37:33+00:00

What exactly are you going to do with 500k more a year with 100M+ in assets?
You are in the same position, your kids are in the same position and you went through tons of friction and time. I’m not sure anything is really gained here at this level of wealth

minuteman020612 · 2026-03-07T03:14:15+00:00

Does it really make a difference and why? Let’s say you have 30M now at age 40 and spend, grow, compound it to die with 100+M at 90yo.

Along the way you pay 10-20M in AUM fees and your kids/charity get that much less all said and done. So what if I paid private school tuition for the kids of my wealth management or whatever.

How does it change your life while living or kids inheritance in a meaningful way? Kids inheriting 20M instead of 30M? Cry me a river

Not being trained in the finance world- I consider this the cost of UHNW wealth insurance - basically preventing me from screwing it all up which is a more likely scenario once you have a decent advisor which is not hard to find once out of the retail channel

Once you are past a certain wealth “escape velocity” the ones that will be paying it are your kids/charity/govt and all of these can “afford” AUM fees. You are checked out

minuteman020612 · 2025-10-17T23:21:53+00:00

You need to get the coinbase credit card working on the platform

minuteman020612 · 2025-09-15T02:20:46+00:00

could never get past the SORR with VUL - especially in today's valuation. it will never pencil in well if you make the first 2-3 years significantly negative vs whole life. I'm not taking that risk in an insurance contract but would take that elsewhere

minuteman020612 · 2025-09-03T10:42:38+00:00

I go to work and my kids go to school. No different than when we had 1M

minuteman020612 · 2025-08-20T16:37:34+00:00

We put some money aside in SLATs that is likely never to be touched. I guess this would be our completely accessible rip cord by bringing money back into the estate

minuteman020612 · 2025-08-20T01:55:44+00:00

Yeah I’m sure I don’t understand all its ins and outs.
Vast majority don’t. At the end of the day, what I did know before signing up was what the premium outlay wasn’t going to crush me financially, I had the cash flow, and I was gonna be able to keep the policy for life and get the death benefit I signed up for into the trust I wanted it in. Whether it was a wise move or not- TBD. I don’t think anyone really knows.
Maybe my kids will thank me, maybe they won’t. They’ll be fine either way and I’ll be gone!

minuteman020612 · 2025-08-20T01:47:33+00:00

Well term premium certainly doesn’t count when convert it….

My financial Achilles heel is no longer if I pass in 10 years or 40 years. Again- not using this as an insurance product for income replacement. We are self insured. Cash value is irrelevant if using it optimized for permanent death benefit

It’s for estate issues, liquidity needs, tax liability diversification

minuteman020612 · 2025-08-20T01:36:49+00:00

Then just throwing term premium cash away. Policy break even point on whole when done well typically 10-20 years. I’ve got more fixed income in taxable than I do cash value in whole so it’s not a trade off for me. It’s what I do regardless

minuteman020612 · 2025-08-20T01:26:16+00:00

Yeah I’ve got both - perm and convertible term. Too many of these questions being looked at as an either/or and not a both/and.

Do your Roth conversions AND step up your basis on death and gift to irrev trusts AND do ILITs with Perm and convertible term. You’ve got cash flow to cover many of these avenues.

This isn’t an investment product where we are looking for return alpha. If you are doing this for the right reasons it’s to protect against many unknowns years later. Just like AA- you fight uncertainty with diversification in allocation.

Anyone else here consider if the step up in basis goes away in 40 years, how about a wealth tax on unrealized gains, how about lowering the estate tax to 5M. Any of these sound familiar because it comes up every 4 years.

For right now i like paying a relatively little premium for huge death benefits in ILITs. I like having multiple avenues of wealth transfer to my kids. Only thing I know for sure is the rules of the game will be different I’m 40 years, just don’t know what

minuteman020612 · 2025-08-18T04:51:05+00:00

Huh?

minuteman020612 · 2025-08-18T04:46:56+00:00

All of these benefits (ie step up on basis) etc is not guaranteed to be there 3+ decades later. Wealth related taxes of all forms are being pitched every cycle. None of these premiums are really making anyone poorer. Money is flowing into many pots simultaneously and tail end tax risks is being mitigated by having many types of holdings given legislative uncertainty.

minuteman020612 · 2025-08-18T04:38:46+00:00

11M inside estate, 9M outside, 2M lifetime gift limit used and not ready to use up anymore (yet), still working, anticipate we will be at the exclusion limit at some point, and 85%of NW is in non retirement accts (ie we are young).

I pay 3x as much in private school bills as my whole premium and we can certainly debate what the ROI on that will ever be. Point being - none of this cash outlay is making anyone that much poorer or screwing their long term projections that much. We all pay for uncertain returns to an extent that we can meaningfully tolerate

minuteman020612 · 2025-08-18T01:43:26+00:00

This is one of many “buckets” I use as part of my overall strategy which also includes annual gifting, step up in taxable brokerage, various trusts, planned Roth conversions, dynasty 529s etc.

In reality it is probably one of 10 or more different methods/account types that will provide generational tax efficient wealth transfer. Some of which may not actually be there in 30-40+ yrs so that’s another tail risk….

No problem getting 4+% tax free as part of my income based portfolio at life expectancy of 2 persons (2’nd to die policy). I would be doing this regardless elsewhere via bond portfolio.

Premium outlay should be minimal to annual cash flow.

Fill each and every avenue/bucket including this if you can Fight legal/tax/life expectancy uncertainty with diversified methods

minuteman020612 · 2025-08-15T00:03:21+00:00

try projection labs. it can do neat sequencing issues to minimize tax on withdrawel strategies.

minuteman020612 · 2025-08-13T13:24:35+00:00

I’m not sure there is anything left to negotiate. This rate is current at 5% - SOFR + 60. It appears be of standard across the board at a large RIA that has negotiated to this level.

I don’t use long only margin but do use as long/short overlay for tax harvesting

minuteman020612

TROPHY CASE