I cannot imagine making a 17 year bet on a startup. I like that you're all parents (+ an uncle, close enough) and actually adults rather than a crop of 20 year olds about to be acquihired, but what happens if you just stop for any reason?
You see -- those kind of red flags to me would be a huge no-no. Like those Cayman accounts and other accounting practices.
Something is fishy here.
Your savings account is held by a Delaware corporation. Oh no!
And yet more here:
What happens if TrustEgg goes out of business, is my child’s account safe?
Definitely. If TrustEgg has to close its doors, or destroyed by an act of god, the underlying accounts would be transferred to another Trust Co, or the child’s parent/guardian would be named custodian. This would be done at the discretion of the State Division of Financial Institutions.
Obviously, when buying a Vanguard fund at a Vanguard account there is no fee
For the general case it probably makes more sense to just invest in Vanguard directly. The downside is that people would have to do their own research in regards to asset allocation. But imo that endeavor would be worth it seeing how these accounts will be around for potentially decades.
"Watch it grow",
"The money in the account will be invested in a mutual fund and will grow at the market rate of return!"
Then somewhere deep down in the FAQ they say they use Vanguard Wellington.
Is anyone that naive to fall for this?
What's wrong with regular UTMA, UGMA or 529 accounts?
(I have two kids, aged 5 and 1 -- both have 529s with Utah UESP, one of the best 529 plans out there)
Quoting wikipedia on the difference this makes.
> The donor can serve as a custodian, rather than transferring the property to someone else to hold for the minor. However, the value of custodianship property is included in a donor’s gross estate if the donor dies while serving as the custodian.
I looked into that, but since my kids have dual citizenship (US/Italy), and since I could easily envision them not going to school in the US, or deciding that university isn't for them, the penalty provisions of that seemed a bit onerous.
There are 354 foreign schools/colleges listed, 7 of them in Rome. I did not check other cities in Italy.
It's not too late! Take whatever help the government gives you!
"PONTIFICAL NORTH AMERICAN COLLEGE"
Which sounds like some sort of religious institution. Also, none of the major Italian universities in Rome are listed, to say nothing of the University of Padova here in Padova/Padua, which is one of the oldest universities in the world, and where Galileo spent "the happiest years of his life". Granted, these days it's not ranked that well worldwide, but hey, who knows where they'll end up, and getting 10% grabbed sounds like a bad deal.
Not that you can't make a service around wrapping a nicer UI on top of something that many people legitimately find complicated. I just wondered if TrustEgg offers any services that Vanguard doesn't offer at all, or if they just provide a user-friendly face on a complicated but working process.
Also note that lifetime tax-free limit is $5.12 million. So if you 'accidentally' gift more than $14k, you just fill form 709 and pay no taxes till $5.12M