What Can We Learn From Guy Fieri? How Education Trusts Can Empower the Next Generation

Celebrity Chef, Guy Fieri, recently made some headlines (at least in my weird feed LOL) when he announced that his kids can only get their inheritance from him if they get two degrees. Despite his $100M Food Network contract, he borrowed a line from Shaquille O’Neal and told his children:

“If you want any of this cheese, you’ve got to get two degrees.”

There you go!

So, What Can We Learn From This Frugal Foodie?

We can talk all about educational trusts.

Yes, in Florida, one can set up a trust with the specific purpose of education for a beneficiary. The idea is that the beneficiary can only use the funds for educational or schooling purposes.

Of course, we would want to specify:

• What would happen to the funds if the beneficiary doesn’t pursue the education
  
• What happens to the funds at the beneficiary’s death
  

Just like in any other trust.

Types of Education Trusts

The education trust can be:

• A living trust, set up while the grantor is alive
  
• A testamentary trust, created at the grantor’s death via the grantor’s last will
  

We typically establish a separate educational trust for each beneficiary. It’s not very common to have multiple beneficiaries in an education trust, but there’s no reason why it can’t be done.

Why Choose an Education Trust Over a 529 Plan?

The education trust can invest in a very wide range of investment opportunities, which makes it sometimes more attractive than a 529 plan.

Don’t Forget the Tax Side

Now, as always, we want to get our accountants to:

• Bless our souls
  
• Walk us through the funnest of topics:
  
  • Gift tax
    
  • Income tax (Who pays? The Grantor or the beneficiary?)
    
  • Capital gains tax
    

We can then run the numbers and see if the education trust makes sense on a business level.

Wrapping It Up

So, there you have it, we learn that there is such thing as an education trust and who doesn’t love a chef serving a side of higher education or frying up a batch of knowledge or mixing up some financial wisdom LOL