At KissTrust we often are asked whether a KissTrust grantor can do this himself or herself. It is possible, but it’s going to be expensive and time consuming. Here’s why:

First, because the KissTrust is a legal entity, you will need to find an attorney to draft comparable trust documents. Your attorney must be familiar with complicated trust concepts. Because of the specialized nature of trust and asset protection law, this means your lawyer will be expensive. You’ll probably have to pay a retainer fee in advance. And since lawyers bill by the hour, there is a tendency for costs to get out of control. 

There are online services that provide legal documents. But none deal with irrevocable trusts, especially where the trust is for your child’s retirement.

Second, you will also have to spend your valuable time meeting with the lawyer – which is always fun. In addition to meeting, you will have to devote additional time reviewing complicated documents, including those protecting the lawyer!

Third, you will have to identify appropriate trust investments. This is a very important part of the process, and will determine whether the trust will be simple or complicated to administer, and whether it can generate appropriate returns. Selecting the trust assets and determining how they should be invested will involve using financial professionals who you will have to pay, either by a fee or through a commission. And can you be sure that your financial professional will understand what you are trying to accomplish for your child or grandchild?

Finally, if the trust invests in assets other than a variable annuity, the investments will generate income that will require the preparation of Federal and state tax returns. In most cases income taxes will be due. There might also be estimated tax payments to keep track of. These expenses and taxes will have a huge negative effect on the growth your child or grandchild’s potential retirement assets. 

Why bother with all this complication?

KissTrust takes care of everything for you! Here’s how:

We make available a legal document specifically designed to provide for your child or grandchild’s retirement.  

We’ve made arrangements with a law firm to represent you in connection with the preparation of the KissTrust. These lawyers are paid out of the setup amount. You pay no additional fees for this special legal representation.

You don’t have to meet anyone to set up the KissTrust, saving your valuable time.   Your child or grandchild’s KissTrust can be established in as little as 20 minutes.

Care has been taken to select a trust situs that provides beneficial asset protection.

We provide ongoing oversight, to make sure that your KissTrusts operate the way they are supposed to. 

If the KissTrust is invested in a variable annuity, there will be no current taxable income until your child or grandchild takes a retirement distribution. This means that retirement assets grow without current income taxes or tax returns, maximizing the potential available amount. (If you want KissTrust assets invested in mutual funds, that is available, but tax return preparation and income taxes will likely arise).

The KissTrust provides a default investment option that manages itself. There is no need to hire a financial advisor to determine how KissTrust assets are invested.

You certainly can replicate the KissTrust by yourself. But why bother, when KissTrust takes care of it all for you!

April 2008 - Frank Palmieri, profiles KissTrust in Employee Benefit News as an innovative employee benefit.

To read the full article and the associated interview with Glen Armand of KissTrust use the "read more" link below.

The Annual Social Security Trustee Report (2007) indicates that the funding for Social Security and its related programs has severe and growing problems.

Certain parts of the Social Security program are projected to run out of money as early as 2019 and the program is projected to have completely exhausted all assets by 2041. Once the assets are exhausted Social Security, by law, will no longer be able to pay benefits.

More and more, it appears that the current generation may be the last to benefit from Social Security as we know it.  Compounded with the drop in defined benefits’ retirement plans; a genuine urgency is created to take control of your child’s financial and retirement future.  KissTrust, Inc. recognizes this and wants the best and financial independence for your family.  KissTrust – the new way to take control of your child’s financial future, regardless of Social Security.

The Trustee’s report summary, as follows, warns of the dire consequences for the nation’s economy and projects serve increase in taxes as well as cut in benefits to be required.

The entire 2007 report can be found at the following link:

http://www.ssa.gov/OACT/TRSUM/trsummary.html

A MESSAGE TO THE PUBLIC:

Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. This message summarizes our 2007 Annual Reports.

The financial condition of the Social Security and Medicare programs remains problematic; we believe their currently projected long run growth rates are not sustainable under current financing arrangements. Social Security's current annual surpluses of tax income over expenditures will soon begin to decline and then turn into rapidly growing deficits as the baby boom generation retires. Medicare's financial status is even worse. Medicare's Hospital Insurance (HI) Trust Fund is already expected to pay out more in hospital benefits this year than it receives in taxes and other dedicated revenues. The growing annual deficits in both programs are projected to exhaust HI reserves in 2019 and Social Security reserves in 2041. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the new prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow faster than the economy and beneficiary incomes over time.

The drawdown of Social Security and HI Trust Fund reserves and the general revenue transfers into SMI will place mounting pressure on the Federal budget. In fact, this pressure is already evident. For the first time, a "Medicare funding warning" is being triggered, signaling that non-dedicated sources of revenues-primarily general revenues- will soon account for more than 45 percent of Medicare's outlays. By law, this warning requires that the President propose, and the Congress consider, remedial action.

We are increasingly concerned about inaction on the financial challenges facing the Social Security and Medicare programs. The longer we wait to address these challenges, the more limited will be the options available, the greater will be the required adjustments, and the more severe the potential detrimental economic impact on our nation.

Social Security

The annual cost of Social Security benefits represented 4.2 percent of Gross Domestic Product (GDP) in 2006, is projected to increase to 6.2 percent of GDP in 2030, and then rise slowly to 6.3 percent of GDP in 2081. The projected 75-year actuarial deficit in the combined Old-Age and Survivors and Disability Insurance (OASDI) Trust Fund is 1.95 percent of taxable payroll, down from 2.02 percent in last year's report. This decrease is due primarily to revisions in key assumptions and to changes in methods. Although the program passes our short-range test of financial adequacy, it continues to fail our long-range test of close actuarial balance by a wide margin. Projected OASDI tax income will begin to fall short of outlays in 2017, and will be sufficient to finance only 75 percent of scheduled annual benefits in 2041, when the combined OASDI Trust Fund is projected to be exhausted.

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 16 percent in payroll tax revenues or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system is solvent on a sustainable basis beyond the next 75 years would require larger changes. To the extent that changes are delayed or phased in gradually, larger adjustments in scheduled benefits and revenues would be required that would be spread over fewer generations.

Medicare

As we reported last year, Medicare's financial difficulties come sooner-and are much more severe-than those confronting Social Security. While both programs face demographic challenges, the impact is greater for Medicare because health care costs increase at older ages. Moreover, underlying health care costs per enrollee are projected to rise faster than the wages per worker on which payroll taxes and Social Security benefits are based. As a result, while Medicare's annual costs were 3.1 percent of GDP in 2006, or about 72 percent of Social Security's, they are projected to surpass Social Security expenditures in 2028 and exceed 11 percent of GDP in 2081.

The projected 75-year actuarial deficit in the Hospital Insurance (HI) Trust Fund is now 3.55 percent of taxable payroll, up slightly from 3.51 percent in last year's report. The fund again fails our test of short-range financial adequacy, as projected annual assets drop below projected annual expenditures within 10 years-in 2013. The fund also continues to fail our long-range test of close actuarial balance by a wide margin. The projected date of HI Trust Fund exhaustion is 2019, one year later than in last year's report, when tax income will be sufficient to pay only 79 percent of HI costs. HI tax income falls short of outlays in this and all future years. The program could be brought into actuarial balance over the next 75 years by an immediate 122 percent increase in the payroll tax, or an immediate 51 percent reduction in program outlays or some combination of the two. As with Social Security, adjustments of greater magnitude would be necessary to the extent changes are delayed or phased in gradually, or to make the program solvent on a sustainable basis beyond the 75-year horizon.

Part B of the Supplementary Medical Insurance (SMI) Trust Fund, which pays doctors' bills and other outpatient expenses, and Part D, which pays for access to prescription drug coverage, are both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet next year's expected costs. However, expected steep cost increases will result in rapidly growing general revenue financing needs-projected to rise from 1.3 percent of GDP in 2006 to 4.7 percent in 2081-as well as substantial increases over time in beneficiary premium charges.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires that the Medicare Report include a determination of whether the difference between total Medicare outlays and dedicated financing (such as premiums and payroll taxes) exceeds 45 percent of total outlays within the first 7 years of the projection period (2007-2013 for the 2007 Report). The Act requires that an affirmative determination in two consecutive reports be treated as a "funding warning" for Medicare that would, in turn, require a Presidential proposal to respond to the warning and expedited Congressional consideration of such proposal. The 2007 Report projects that the difference will surpass 45 percent in 2013 and therefore makes a determination of excess general revenue funding. Because the 2006 report also made such a determination, a "Medicare funding warning" is hereby triggered that requires the President to propose legislation that responds to this warning within 15 days of the submission of the Fiscal Year 2009 budget and for Congress to consider the proposal on an expedited basis. This requirement will help call additional attention to Medicare's impact on the Federal budget.

Conclusion

The financial difficulties facing Social Security and Medicare pose enormous, but not insurmountable, challenges. The sooner these challenges are addressed, the more varied and less disruptive their solutions can be. We urge the public to engage in informed discussion and policymakers to think creatively about the changing needs and preferences of working and retired Americans. Such a national conversation and timely political action are essential to ensure that Social Security and Medicare continue to play a critical role in the lives of all Americans.

By the Trustees:

• Henry M. Paulson, Jr., Secretary of the Treasury, and Managing Trustee
• Elaine L. Chao, Secretary of Labor, and Trustee
• Michael O. Leavitt, Secretary of Health and Human Services, and Trustee
• Michael J. Astrue, Commissioner of Social Security, and Trustee
• John L. Palmer, Trustee
• Thomas R. Saving, Trustee

The entire 2007 report can be found at the following link:

http://www.ssa.gov/OACT/TRSUM/trsummary.html