KissTrust: Giving the Gift of Savings

Although the cost of raising a child can be enormous, the cost of saving for a child’s future doesn’t have to be, thanks to the ingenuity of a …

Although the cost of raising a child can be enormous, the cost of saving for a child’s future doesn’t have to be, thanks to the ingenuity of a new saving tool called the KissTrust. A KissTrust is an irrevocable trust that turns a modest gift for a child into hundreds of thousands, even millions of dollars through long-term compounded growth. In addition to protecting the assets from being seized by third party creditors, bankruptcy and divorce, a KissTrust provides protection for the child’s financial future by specifying when the funds can be accessed and for what purpose.

The story behind KissTrust began when Glen Armand, CEO for KissTrust, Inc. utilized his extensive experience in specialized trust work for Fortune 500 companies and major nonprofits in designing a special trust for his grandchildren.

“My eldest son graced us just a few years ago with twin grandchildren and I wanted to do something for them,” he said. “I wasn’t confident that Social Security was going to be there for them as a meaningful benefit, so my wife and I wanted to create a financial safety net that would help secure their future later in life.”

After an unsuccessful search for a retail product that would meet the needs of what they wished to accomplish, Armand put together a trust that would lay the foundation for what would later be offered on the market as KissTrust. Family and friends encouraged him to make the product available to everyone.

“KissTrust also allows a parent or a grandparent, or aunts and uncles to start a trust for a loved one and let the advantage of time work to their benefit as opposed to time working against [them],” Armand said. For example, a gift of $2,500 that is put into a KissTrust for a child, the beneficiary, at birth has a projected value of $1.3 million to $1.5 million when the beneficiary reaches age 65.

Because “the magic of KissTrust is the compounding,” Armand said, the earlier that money is put into a trust, the better. A gift of $2,500 that is put into a KissTrust for a beneficiary at the age of 25 has a projected value of $120,000—a sizable amount, but less than 10 percent of the projected value of a trust started at birth.

“By starting earlier in life, those extra 25 years of compounding [are] literally worth more than a million dollars,” Armand said.

Furthermore, KissTrust can provide children with a head start on retirement savings for several years before they are able to acquire any earned income that can be put towards a 401(k) or IRA account.

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The concept behind long-term, compounded growth is nothing new, but a KissTrust offers a unique advantage not found in other traditional saving account options: the ability for grantors to specify when funds can be released from the trust, how much can be taken out and the purpose for which those funds are used. For example, a KissTrust might be set up so that a beneficiary can access the full account when he or she reaches retirement age; or, it might be set up so that a beneficiary can access a percentage of the account for college expenses or their first home purchase.

KissTrust provides grantors with a measure of control that is not offered by Uniform Gifts to Minors Act (UGMA) accounts and Uniform Transfers to Minors Act (UTMA) accounts.

Click here to start saving with ING DIRECT!“In the industry, UGMAs and UTMAs are jokingly referred to as Cancun accounts, because as soon as little Jonny [or] little Mary reaches the age of majority…the assets fly out the door,” Armand said. “In fact, 95 percent of the assets in UGMAs and UTMAs are completely gone by [the time the account holder reaches] the age of 25.”

And unlike UGMAs and UTMAs, money that is safely locked up in a KissTrust does not offset financial aid benefits, because it is not considered as part of an individual’s assets.

“We had one instance where a gentleman was [attending graduate] school, but because his wife had a large UGMA account, he was going to lose a full-ride scholarship,” Armand said. “We were able to help them convert that UGMA into a KissTrust and [help him] avoid losing that scholarship.

A KissTrust can be set up for a one-time fee of $199 and $99 for each additional trust. Because the KissTrust is a “100 percent turn-key service,” grantors are spared thousands of dollars in legal fees to draw up similar trusts on their own, according to Armand. Essentially, KissTrust provides an affordable and powerful vehicle for savings that has previously been reserved for the ultra-wealthy, he said.

A KissTrust can be invested in a tax-deferred annuity or an after-tax mutual fund. Generally, it is recommended that money intended for long-term growth of 15 years or more should be invested in a tax-deferred annuity.

“Even with a slightly higher expense ratio associated with a variable annuity, the advantage of tax-deferred compounding offers you a significant increase in ultimate benefit over the after-tax option,” Armand said. “On a side-by-side comparison assuming the exact same set of returns, but with a higher expense ratio deducted from the variable annuity, the tax-deferred option, the tax-deferred option produces hugely, almost two-to-one better.”

A KissTrust can be invested using age banded asset allocation, a method that automatically allocates investments in increasingly conservative portfolios as the beneficiary reaches certain age markers. Grantors, however, can step in at any time and begin directing the investments themselves.

A staff of consultants is available to discuss options and provide advice for potential grantors who are interested in opening a KissTrust. Once a KissTrust is opened, grantors and beneficiaries receive various types of support, such as balance statements and online access to accounts. Furthermore, KissTrust, Inc. monitors statutory changes at the federal or state level that would impact the trust, and also monitors the credit quality of the financial carrier, particularly in the case of trusts invested in variable annuities, for any signs of distress.

In the case of any relevant external changes that would affect a KissTrust, the company would notify the family contact and recommend possible actions to be taken, such as an amendment to the trust or a transfer of the account to another carrier.

It is also worth noting that a KissTrust can provide a number of secondary benefits, such as the freedom for the beneficiary to pursue the career of their choice without feeling pressured to build their retirement savings. A Kiss Trust can also teach children the value of long-term savings, once grantors allow them to have disclosure regarding the trust. In the case of Armand’s children, knowledge about the trust “has raised [their] financial awareness and financial education…dramatically,” he said.

Finally, the concept of making KissTrust available to everyone has broad implications in changing the financial landscape for today’s children.

“On a personal note—this is true for both myself and my partner, Larry Eisenberg—we hope KissTrust is as much about…breaking the cycle of people playing financial catchup,” he said. “Parents [and] grandparents have an opportunity to dramatically change the financial landscape for their children and grandchildren.”

For more information about KissTrust, visit


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