Dave, thanks very much for your message. All the money that is going into the Fidelity SNT account are funds that already belong to our son, but are held at a different firm. So we are not contributing anything to it, just setting it up and moving the funds. So, no taxable event for us, if I'm reading you right.
It is a revocable trust, so my wife will use her SSN to set up the account as you suggest. Our son has ~$50k in a brokerage account, and another ~$6k in a Roth IRA. Since investments at the other firm need to be liquidated to move them, I'm assuming that will create a taxable event for him in the year they are liquidated--capital gains on the brokerage account earnings (divs & interest), plus 10% early withdrawal penalty and capital gains on the liquidated Roth earnings. Is that correct?
So, another question, if you are willing to offer more: who files taxes on the gains (divs & interest) in the SNT when they occur? I'm hoping not the grantor/trustee (us--we file jointly), because it's not our money/gains and it would throw a monkey wrench into our tax situation. A separate return for the SNT?
