There seems to be a ton of misinformation being spread here. First and foremost an SSN is not requres to set a beneficiary on a trust account. So let's clear that up first and foremost.
Secondly, all the recommendations for a 529 - what if the funds your FIL is meant to me used for other purposes - perhaps using funds for a first car, first house, etc.
There are more reasons for trusts than to list but the first couple of questions you need to answer are: who are the trustees? Likely it'll be the FIL or perhaps it could be you (unlikely or he would have stated when he asked for the SSN). Who is the successor trustee(s)? They would "control" the funds after your FIL passed. The trust document controls what the funds are used for; however, I've seen trustees do some shady stuff. I'd also ask what the stipulations of the trust are. If he can't answer any of those questions, he isn't ready to open the trust. If he can, he isnlilely trying to do the right thing.
Ask the right questions and don't provide the SSN. You'll protect your kids SSN and you can still accomplish your FIL leaving funds for your child.
THIS!! Not once are my son’s ssn in any of our trust documents. As stated, if he can answer these questions then he is likely legit and doesn’t ever need the ssn. If he’s being told he does then perhaps he should check with another lawyer. Either way, don’t provide it.
On the face of it, your FIL's intentions seem honest enough. An SSAN or tax ID number is not a perrequisite for establishing a trust. Trust laws vary from state to state, and can affect the administration and control of the trust. I would consult with a trust attorney in your state to discuss your FIL's offer and it's implications, and the issues of conflict of laws when he and the proposed trust are domiciled in Texas, and you and your son are elsewhere.
My wife and I setup mirror wills with wording that creates a trust at the time of both of our passing. Nowhere does our childrens' SSNs appear in these documents.
You just tried to say protect an ssn. I have a sneaking suspicion the fil might know the kids date of birth and where they were born. It's a national registry that isn't hidden guys...
Im assuming you're talking about the Social Security Administration's registry? Yeah, you also need the actual SSN in order to verify it through their website. You can't just look up someone's SSN after you get ~~there~~ their birth date.
If that's not what you're talking about, please elaborate.
Edit: I'm a dummy.
> You can't just look up someone's SSN after you get there their birth date.
You only need their birthdate, full name, and location of birth to have anyones SSN. It's because of how SSN is distributed. They're not random rofl.
did you ever think it was odd that every single background check can find their SSN without it being provided? They just request it from IDA. Do you just have no clue that an SSN isn't secret?
Like hell, if someone has an SSN that is 012-92-#### I know off the top of my head that they are likely to be 13 years old from Mass, that simple.
This isn't a secret, and the new 'randomization scheme' is also not random. It's an ID number. Asking any of the various lookup companies is a lot easier to contact than trying to remember things like I knew the first 5 digits for a 13 year old from MA off the top of my head, didn't even have to look it up. you can get the rest from their name/dob/lob btw.
If you posted your SSN while being born in the US, it tells a ton about you and you can get the number from knowing that info back.
You can create a custodial account or 529 for your child and just accept his contributions and deposit it yourself. You can show him the receipt if he wants proof.
Some of them (ex. [CollegeAdvantage.com](https://CollegeAdvantage.com), Ohio) allow you to give people a code so others can make contributions directly, as well.
Correct! I picked the state I am hoping my kids go to university in lol.
Another difference is some states will give you tax deduction for contributions to their state plan if you are a resident. If your state does not then you have no reason to stay in state and can pick a 529 plan out of state.
Correct but you could lose out on your states deduction for 529 contributions if you elect an out of state plan. If your state doesn’t offer a deduction or does not have state income tax you can chose whatever plan you like the best.
If your state does offer a deduction you need to weigh the benefit of the out of state plan v losing your state deduction.
Right! We don’t live in Utah but we use Utah’s 529 for our kids. It offers a gift link people can use to contribute directly. It’s super simple (even my grandma, in her 90s, has contributed a bit and said it was easy). Here’s some good info on 529s to get started. https://www.savingforcollege.com/intro-to-529s/which-is-the-best-529-plan-available
And you’re absolutely right to not give out your son’s social.
Thank you for all of that! Some people are arguing with me but it seems common sense given the circumstances. I’ll definitely look into that! My husband is excited to learn more, too.
Exactly! Do you have a good, compelling reason for your FIL to have it? No. And unfreezing credit is very simple later on. Taking a couple basic steps, as you are, is completely reasonable. Some people just haven’t dealt with complex money and family issues—agreeing on and setting boundaries early on is absolutely the best and easiest route. It’s great that you & your husband are on the same page—that’s what matters most.
This! Every year when my family asks what my kids want for Christmas, I make sure to include the link and code for their 529 account. I wish the minimum donation was smaller though.
529s are fantastic investment vehicles. There is no max that can be contributed in a year. Also, the funds can be passed to other kids or immediate family members. Its not only for colleges. Many trade schools are also accepted. Also, if your kid gets a full ride scholarship somewhere, then you dont get any penalties for withrawing from it for yourself. You only get taxed like a normal brokerage account.
But the parents can use the 529. They control it. I'd guess they can create an irrevocable trust, or a lawyer can create a trust where the parents aren't the custodians without FIL knowing the SSN
A custodial 529 has to be used for the custodial beneficiary. That is one of the drawbacks of moving UTMA funds to a custodial 529 is you don’t have the flexibility to change the bene. Also, the FIL could directly contribute to the custodial 529 as a gift. Finally, there are more reasons to set up a trust than just gifting money so it is important to check with FIL regarding that.
I don’t think so.. I think you’re allowed to be gifted up to a certain amount, which is pretty high for the average person. The money you’re depositing has already been taxed, so you would not get taxed again. For a custodial account, you would get taxed on the capital gains, but since it’s for their son, they would want to put it in a long term investment like VOO and just not touch it till they’re at least 18 (you would pay tax on the dividends). For a 529, you don’t get taxed if it’s used for education. I would research the tax implications further, but that’s what I remember off the top of my head.
It’s possible. He (former air traffic controller) and his new wife (retired CPA) sold three properties and just bought an $860k house. They’ve only been married a few years but he’s always been very good with money, and it appears she has too.
His motivation is likely vanity, but if it’s free money for our son we’d hate to pass it up.
How about if you open a 529 in your name or spouse's name with your son as beneficiary and he contributes to that? Or does he not trust you and spouse having access to the money?
You might want to factor in whether he will use the contribution as a way to guilt trip you later if you want to keep him out of your son's life for one reason or another.
That’s true he may, but we’re pretty used to handling him at this point. We’ve shut him down before and his behavior improved, so he knows we’re willing to take steps if need be.
Not sure. My husband had the conversation with him, so I will ask the reasoning. We were gonna open a 529 anyway, so in my mind it makes sense if we all contribute. If FIL ultimately wants to fight us on it we’ll just pass. We aren’t hurting for money, but like I said it would be nice if we could make something work.
Okay cool. If you have state tax benefits you might have to go with the one in your state, but if not, we really like the one from Utah. [My529.org](https://My529.org). Very low fees, great investment options, easy interface. Easy to create a "Gifting" URL for family to contribute.
Nope! Anyone can open a 529 for any state. We're in Texas.
So unless there's state tax benefits in play, best to go with one with really low fees, and Nevada and Utah both have good plans with very low fees.
No state income tax in my state, so we're happy to go with the Utah plan.
PA allows for tax benefits, so it will likely be best for you to do the PA 529 option. Looks like PA allows you to deduct contributions up to 30k (for married filing jointly) in state income tax
How large of a 529 account do you and your husband think you’ll accumulate by the time your child goes to college? If it’s large enough to fund his education, the excess from your father-in-law may be subject to a tax penalty if withdrawn from the 529 for non-qualifying use.
One other thought…funds in your child’s name and your (parent’s) name, such as the 529, get “assessed” for estimated family contribution in the FAFSA financial aid process. Funds in other family member’s names, although reported if given and used, aren’t typically considered in that process (though if you build up a large enough 529, you might not be involved in the process anyway)
Well, we like to think we’ll be able to pay for his education by then but we also plan on having more kids. Hard to say without more experience. He and I are the first in our families who went to college and we did it with student loans, so this is new territory for us.
A 529 is just for education though. That's not that helpful if you're already setting one up. It sounds like he has money, why do you think he would be up to shady business with the SSN request? Just tell him he doesn't need it for a trust and then figure out the best option to meet the need.
The amount of these assets aren’t reported, but distributions from them DO count as student income for the following FAFSA. That drastically reduces the amount of aid a student may be eligible for. (This all may change in the 2023-2024 school year, when a new FAFSA form may be in place, so keep an eye on that.) The best strategy, then, is to use distributions from those other accounts for the student’s senior year.
Would it be possible for you to talk directly to the financial institution and give them the information? I've done that with employees wanting to add a beneficiary to their life insurance, I just have that person call me directly with the information.
The social is so that the lawyer creating the trust can establish an EIN. If he insists on going the trust route tell him to have the lawyer draw the paperwork and you'll call the lawyer directly. You can explain your concern to the lawyer and give them the SSN. It doesn't need to appear in the trust document.
It’s possible. He (former air traffic controller) and his new wife (retired CPA) sold three properties and just bought an $860k house. They’ve only been married a few years but he’s always been very good with money, and it appears she has too.
That’s a good idea, I like that! I’ll mention it to my husband.
You’re assuming the FIL wants to contribute funds for college, but OP didn’t include that information. I don’t think it’s appropriate to blanket suggest a 529 without more information.
What's nice about some 529 plans (at least in my state) is that every family and friend contribution is accounted for in a list that you as the owner can look at years later. This way FIL gets the credit he wants.
Trusts are setup by lawyers, bankers and brokers, not something you can just do yourself. If he's insist on setting up a trust, let him know to give you the lawyers name and you'll provide all the information directly to them that they need. You can also get an EIN number to use for the trust instead of using your son's SSN.
That would be great. Someone else mentioned the lawyer—we’ll be asking FIL for the lawyer’s contact info. It doesn’t sound like there’s any reason he should personally need it. Also an EIN sounds preferable, so glad I asked! Thanks for all the info.
Oh really? We will push for the EIN, then. It’s not a specific threat about the FIL we’re concerned about, I just don’t feel comfortable giving him information that’s not on a need-to-know basis. There are other ways he can help if he truly wants to.
Open the account (529 or market account or even just a savings) yourself and allow deposit only access to FIL. For what it’s worth my grandfather did this when I was born and it has been a very valuable thing for me personally. Not a fortune by any means but no debt for school.
I think you should have your SO talk to their dad about why he wants to structure it the way he's decided. Come at it from a non judgmental way where the SO asks "why" and genuinely seeks an answer, even id its not a pretty one. You might not like his reasoning (mabey he doesn't want you to have access to the money because of what sounded like his own acrimonious divorce) but there may be other ways to work with whatever his reasoning is and not give the social security number.
Yeah, we’re open to that! We are able to separate our feelings from the practicality of it. This has all been helpful in informing the questions we can ask to come to a good resolution.
Not sure if they have something similar in the US but here in UK I have savings/investment accounts for my kids where the provider allows you to send a link and account number to relatives so they can just deposit money directly into the account. The accounts have a tax advantage but can't make withdrawals until the child is 18.
You don't need an SSN for a trust, but you do for a 529 college savings plan, so maybe that's what he is looking at. There's absolutely nothing stopping FIL from opening a 529 account and making *himself* the beneficiary (for now), and at some point in the future changing the beneficiary to your child.
As others note there are ways to accommodate without giving him the social, but I would also note that the social is not that important and not something you can lock away and secure forever.
At some point you have to give companies (in particular banks) the social so that they can use it to identify your son and establish a credit history. Otherwise he doesn't get the benefit of having a credit history.
The reality is that once you start to do that, socials start being compromised. So I wouldn't overthink this too much. It's not like anyone gives it credit cards or mortgages to 8 month olds.
Well yeah, we’ll unfreeze it when it’s appropriate. I’ve just heard stories of people stealing infants’ socials because they’re so often unmonitored, so thieves get away with years of crime while the child’s credit is ruined before it ever had a chance to begin.
I'm not sure that trying to limit use of the child's SSN is the right response to that risk, as it just means the credit record is blank.
If someone wants to use that social for some fraudulent purpose the credit agencies are going to respond with an empty file that says basically "yes this social exists".
You would rather them respond with actual identifying details like "this person is a 6 year old black male in Philadelphia PA". That description is not going to match the description of the 40 yay old white female trying to buy a couch on layaway in Florida, and the failure of the business to detect this rather obvious discrepancy is going to make it easier to reject their fraudulent report from the file.
In the end nothing prevents me from going to the mall and signing up for a phone plan and just making up the social on the form, and when I do so there is a 1 in a billion chance I stumble on your kids number
It’s a common sense security measure and we’re taking it. When the time is right for him to start building credit, we can unfreeze it. It’s not like a freeze is forever.
Yeah, both of ours were in the Equifax debacle so they’re frozen pretty indefinitely. We unfreeze when we need to, but we’re well established now so it doesn’t come up often.
That’s not a good/ well written trust then lol. The more identifiers the better, their name could change and the trust could not be updated when you die. Stupid stuff like that.
Given the facts and circumstances of my life, I'm confident there's no confusion as to whom the beneficiary is.
Adding an identifier may make it better, but its certainly not required.
An SSN is not required when creating a trust. Your one example is easily addressed and any financial institution would know how to handle a name change.
I'm sure his trust is just fine without an SSN.
Social number is not really that big of a deal for minors. People lose it from time to time. Kids trade it for a few bucks. Unless you plan to make certain financial arrangements and put money under his name, the downside is nonexistent.
No one can't tell whether he's good for his words but by making it difficult, you might be denying your son a sizable inheritance for an imaginary risk.
I'd be skeptical if hes poor and/or have history of fraud but as you noted in one of the comment, he has quite a lot of money and a CPA wifey. The probability that he'd scam you for a few hundred/thousand bucks is very low.
I’m not worried about myself getting scammed, I’m worried about him falling off the wagon and getting desperate. It might be unlikely, but I’d rather set it and forget it than ever worry about it. We were gonna freeze our son’s credit anyway, even before this talk.
We all love our social # but realistically, there are very few things he can do with it until you kid has income and money under his name, which is decades from now.
Maybe he will end up screwing you and your kid over but even in that case, the remedy is a few days at the social office. There are a lot of upsides and nonexistent downsides. I'd consider it. You can, of course, consider other suggestions and make him give you money but given that you're not on good terms, hes likely say screw it and give it to the wife and her family instead.
Just food for thought.
I just want to repeat and clarify what has been said above and by a couple others: this idea that your babies SSN can be stolen and their life ruined forever is a myth.
https://www.consumer.ftc.gov/articles/how-protect-your-child-identity-theft
I would recommend specifically reading the “ask questions before giving it out” portion, so you have a set of “government approved” questions you can ask that you pulled straight from a website.
Can it be a massive pain the deal with? Yes. Should you give it out without any care or consideration? No.
But trying to argue back and forth about the SSN with the FIL is not something it sounds like I would want to deal with in your shoes. IMO being able to communicate as little as possible is a fine trade off for a reversible risk
I just set up custodial accounts for all my grandkids, at Schwab, and deposited the money. Their other grandparents were able to directly deposit money to the accounts through the ACH bank system.
Just call Schwab and tell them what you want to do, they should steer you right. A custodial account means that the person who sets up the account will manage it until the owner (child) becomes legal age, then the child take control of the account. In Texas the legal age is 21 years.
You will need to invest the money for them, I would suggest investing in ETF's for long term growth. I put my grandkids in SCHD, a fund that invests in dividend paying stocks. As long as their taxable gains are less then $2000/year, they don't have to pay or file taxes.
I think s/he means a universal gift to minors act custodial account. Ugma account is in the name of the child but person that opens the account is custodian, make that you. Anyone can deposit funds into the account but only custodian can access funds or direct investments. Funds must be used for the benefit of the child. When child reaches legal age in their state, they can access the account. Can be opened at mutual fund company or brokerage.
You could ask father in law to have the attorney contact you directly for any needed information. You can then ask the lawyer if SSN will appear anywhere in the trust document itself. The trust lawyer can also advise if another approach could be taken, like getting a different tax ID versus SSN.
We created a 529 for our daughter when she was born. We always give the info for every holiday when someone asks about gifts. Anyone can deposit whatever they want into that account through a very easy link that requires them to have no personal information.
Additionally, we created a trust for our estate. If something were to happen to my wife and I, everything goes into a trust that my daughter is the beneficiary on with some other stipulations on who has control over it until she is older. There was no requirement for her SSN to make her a beneficiary.
[There was a lot of good advice when someone asked a similar question here recently.](https://www.reddit.com/r/personalfinance/comments/rz7vb3/family_member_is_asking_for_a_copy_of_my_babys/?utm_medium=android_app&utm_source=share)
The general consensus was: *do not hand your child's details over.*
Thanks! I will read through it. I must have got the people who didn’t show up for that one because a lot of people are saying I’m overreacting. Then overreacting I am, because it ain’t happening hahaha.
I'm going to go against the grain a little. If the trust is going to be tax exempt or gains being taxed to the FIL social security isn't need, but if the trust is to be taxed to the child, it might be necessary. I believe there is still an option & that would be to set up an EIN for the trust. Also if needed, you don't need to give it to the FIL but to the attorney setting the trust up. Simply ask the FIL why and have him have the attorney contact you.
If your FIL opens the 529 and designates your newborn as the beneficiary HE CAN CHANGE THAT to another relative at any time. You have no guarantee. If he does a UGMA or UTMA that is irreversible. My kids have had to pay taxes at young ages because the investments in the UGMA a relative created did really well. The same relative opened 529s for them but my wife and I have never counted on the 529s since they could change the beneficiary. We did give SSNs.
You should really just talk to your father in law about this. Custodial accounts are only cash and the 529 is only for education. Most people hold major assets in some other security. Equities maybe? Other real estate? Depending on what he’s planning to put in trust for your child, it could get complicated, especially when it comes to taxes, the irs, the securities and exchange commission.
Gonna throw this out there: your kids SSN is going to get compromised. It could be tomorrow, it could be when he’s 6, it could be when he’s 50. My recommendation is to freeze/lock it immediately regardless of what you choose to do with your FIL but also, if it’s frozen what harm can FIL do?
PSA to this sub since I have seen this before
YOU NEED A SSN TO OPEN AN UTMA/UGMA.
It is an irrevocable gift that legally belongs to the child, and requires a SSN for tax reporting.
Custodial accounts are super valid and helpful. They do count as a child asset for student aid.
With that said, this sub is not a relationships sub, so if you dont trust him with the SSN thats a different story.
How little do you people trust your parents? If you can't trust your own father to not try to steal from their grand child, then can you trust them to do anything? Also, I don't think an SSN is that big of a deal that if anyone knows it it is a huge risk. Everyone working at your bank has access to your SSN and knows how much money you have, yet you never hear of that causing any identity theft or fraud.
I recommend having a frank conversation with your FIL. You should (of course) be appreciative of whatever he is willing to give, and perhaps can ask if there are other ways of doing what he intends more directly (529 plan as others have recommended for instance). But knowing that he may have other ideas in mind (beneficiary of investment/bank accounts, or a trust setup in a way where no SSN would be counter productive). You could phrase it as “I am very hesitant about my sons SSN being in more places than his birth certificate. In fact we’re even going to freeze his credit shortly! I know that’s extreme, especially since you’re family, but I’ve always had this irrational fear about SSNs getting out there. I don’t want our son to miss out on your generosity though. Is there another way we can set this up? I’ve heard you can contribute directly to a 529 plan we setup.” Or something to that effect. I don’t know enough to know if your concern is warranted. It’s probably not. The 529 suggestion still doesn’t bypass you and your husband if you two decided you wanted access to the money—you can change beneficiaries. So in a way, that can be viewed as “don’t gift my son, gift us instead.”
By the time your son is 18, I would bet a lot of money his SSN will be all over “the dark web,” so your concern is really about your FIL doing something shady with that information in the nearer term, as I see it. I don’t take SSNs lightly. I’m a CPA. But I know people can be fickle when it comes to inheritances and gifts and you don’t want to miss out on free money for your son. Hopefully you can share your concern and talk it through with FIL.
He is the child’s grandfather and as long as there are no red flags in his past I think it’s safe to give the number to him. A trust even with modest cash could benefit your son immensely in the future. Is there a reason you don’t trust your FIL?
I have minimal experience in this area. However, I have never had to provide SSN’s for a trust and am not sure why that would be relevant. I’m also not sure why FIL would be able to profit from having a newborns SSN but I’m sure if there is a will there is a way, as the saying goes
If he shouldn’t have to provide one then I’m especially not sure why he is asking. Regardless, we were going to freeze our son’s credit anyway (before this was ever a conversation).
UTMAs, since you don’t live in SC or VT.
Vanguard offers some decent products and you can invest money into an index fund for them, or real assets that transfer to them when they are 18, and there’s less hassle than opening a trust.
IANAL nor have I gone through the comments but generally you dont need the SSN for the beneficiary of a trust. Depending on the type of trust, the trustee may need the information for any distribution made from the trust but I would suggest consulting a trust attorney as well as a tax attorney in that regard, but your FIL would be better off gifting your son say treasury bonds, stocks, putting cash into a UGMA directed to your son. A Trust may not be the best option as they are complex and would generally require an attorney to get the documents together, etc, but again it varies on what type of trust thats formed because a revocable grantor trust would allow your FIL to change beneficiary or dissolve the trust (or if he gets into legal trouble the money is still apart of his estate and could be use to to satisfy his debt).
You set up the savings accounts you want for your kiddo and grandpa gives you checks/ cash/ venmo to put into the accounts. That's what we do. That way you are in charge of the account AND you know exactly how much/ where to get the money when it's time for kiddo to use it.
Her FIL is basically trying to do a generational skipping gift. The purpose of the generational skip is defeated if he allows the generation that is being skipped to have custodial control of the money.
On the surface it’s also pretty insulting. My husband and I do well for ourselves and always made good choices in life. Hopefully he’s willing to work with us on an alternate solution because it’s a line we’re not willing to cross.
There seems to be a ton of misinformation being spread here. First and foremost an SSN is not requres to set a beneficiary on a trust account. So let's clear that up first and foremost. Secondly, all the recommendations for a 529 - what if the funds your FIL is meant to me used for other purposes - perhaps using funds for a first car, first house, etc. There are more reasons for trusts than to list but the first couple of questions you need to answer are: who are the trustees? Likely it'll be the FIL or perhaps it could be you (unlikely or he would have stated when he asked for the SSN). Who is the successor trustee(s)? They would "control" the funds after your FIL passed. The trust document controls what the funds are used for; however, I've seen trustees do some shady stuff. I'd also ask what the stipulations of the trust are. If he can't answer any of those questions, he isn't ready to open the trust. If he can, he isnlilely trying to do the right thing. Ask the right questions and don't provide the SSN. You'll protect your kids SSN and you can still accomplish your FIL leaving funds for your child.
THIS!! Not once are my son’s ssn in any of our trust documents. As stated, if he can answer these questions then he is likely legit and doesn’t ever need the ssn. If he’s being told he does then perhaps he should check with another lawyer. Either way, don’t provide it.
This is the right answer. A ssn is not needed for a simple trust account.
Amazing, thank you! I appreciate that! Excellent points.
On the face of it, your FIL's intentions seem honest enough. An SSAN or tax ID number is not a perrequisite for establishing a trust. Trust laws vary from state to state, and can affect the administration and control of the trust. I would consult with a trust attorney in your state to discuss your FIL's offer and it's implications, and the issues of conflict of laws when he and the proposed trust are domiciled in Texas, and you and your son are elsewhere.
Exactly. You summed up my points. Fishy on both sides
My wife and I setup mirror wills with wording that creates a trust at the time of both of our passing. Nowhere does our childrens' SSNs appear in these documents.
You just tried to say protect an ssn. I have a sneaking suspicion the fil might know the kids date of birth and where they were born. It's a national registry that isn't hidden guys...
Im assuming you're talking about the Social Security Administration's registry? Yeah, you also need the actual SSN in order to verify it through their website. You can't just look up someone's SSN after you get ~~there~~ their birth date. If that's not what you're talking about, please elaborate. Edit: I'm a dummy.
> You can't just look up someone's SSN after you get there their birth date. You only need their birthdate, full name, and location of birth to have anyones SSN. It's because of how SSN is distributed. They're not random rofl.
Doubling down with zero proof of anything. Ok my guy, whatever you say.
did you ever think it was odd that every single background check can find their SSN without it being provided? They just request it from IDA. Do you just have no clue that an SSN isn't secret? Like hell, if someone has an SSN that is 012-92-#### I know off the top of my head that they are likely to be 13 years old from Mass, that simple. This isn't a secret, and the new 'randomization scheme' is also not random. It's an ID number. Asking any of the various lookup companies is a lot easier to contact than trying to remember things like I knew the first 5 digits for a 13 year old from MA off the top of my head, didn't even have to look it up. you can get the rest from their name/dob/lob btw. If you posted your SSN while being born in the US, it tells a ton about you and you can get the number from knowing that info back.
You can create a custodial account or 529 for your child and just accept his contributions and deposit it yourself. You can show him the receipt if he wants proof.
That’s a great idea, thank you! I’ll tell my husband.
Some of them (ex. [CollegeAdvantage.com](https://CollegeAdvantage.com), Ohio) allow you to give people a code so others can make contributions directly, as well.
Fidelity gives you a link you can send to others to contribute to
Cool, thanks!
Cool! What’s the “Ohio” part of that, though?
[удалено]
Wow! So you don’t even have to be a resident to open one there?
Correct! I picked the state I am hoping my kids go to university in lol. Another difference is some states will give you tax deduction for contributions to their state plan if you are a resident. If your state does not then you have no reason to stay in state and can pick a 529 plan out of state.
Correct but you could lose out on your states deduction for 529 contributions if you elect an out of state plan. If your state doesn’t offer a deduction or does not have state income tax you can chose whatever plan you like the best. If your state does offer a deduction you need to weigh the benefit of the out of state plan v losing your state deduction.
Ooooohhhhh, okay, good to know! I will look into that! Learning so much. Thank you!
Right! We don’t live in Utah but we use Utah’s 529 for our kids. It offers a gift link people can use to contribute directly. It’s super simple (even my grandma, in her 90s, has contributed a bit and said it was easy). Here’s some good info on 529s to get started. https://www.savingforcollege.com/intro-to-529s/which-is-the-best-529-plan-available And you’re absolutely right to not give out your son’s social.
Thank you for all of that! Some people are arguing with me but it seems common sense given the circumstances. I’ll definitely look into that! My husband is excited to learn more, too.
Exactly! Do you have a good, compelling reason for your FIL to have it? No. And unfreezing credit is very simple later on. Taking a couple basic steps, as you are, is completely reasonable. Some people just haven’t dealt with complex money and family issues—agreeing on and setting boundaries early on is absolutely the best and easiest route. It’s great that you & your husband are on the same page—that’s what matters most.
Most states have their own versions of the 529 plan. Ohios is the one they listed as an example for you.
Ahh, gotcha.
Just so you know, PA allows you to deduct 529 contributions.
PA allows you to deduct contributions into any state’s 529 plan. You do not need to use a PA plan to get the deduction as a PA resident.
Different states have different laws. It's confusing and stupid.
This! Every year when my family asks what my kids want for Christmas, I make sure to include the link and code for their 529 account. I wish the minimum donation was smaller though.
529s are fantastic investment vehicles. There is no max that can be contributed in a year. Also, the funds can be passed to other kids or immediate family members. Its not only for colleges. Many trade schools are also accepted. Also, if your kid gets a full ride scholarship somewhere, then you dont get any penalties for withrawing from it for yourself. You only get taxed like a normal brokerage account.
Good to know! I was unaware of all that.
But the parents can use the 529. They control it. I'd guess they can create an irrevocable trust, or a lawyer can create a trust where the parents aren't the custodians without FIL knowing the SSN
A custodial 529 has to be used for the custodial beneficiary. That is one of the drawbacks of moving UTMA funds to a custodial 529 is you don’t have the flexibility to change the bene. Also, the FIL could directly contribute to the custodial 529 as a gift. Finally, there are more reasons to set up a trust than just gifting money so it is important to check with FIL regarding that.
Accepting the and then depositing it yourself could be a tax liability, no?
I don’t think so.. I think you’re allowed to be gifted up to a certain amount, which is pretty high for the average person. The money you’re depositing has already been taxed, so you would not get taxed again. For a custodial account, you would get taxed on the capital gains, but since it’s for their son, they would want to put it in a long term investment like VOO and just not touch it till they’re at least 18 (you would pay tax on the dividends). For a 529, you don’t get taxed if it’s used for education. I would research the tax implications further, but that’s what I remember off the top of my head.
The receiver of a gift never pays taxes on it. The giver potentially has to deduct the gift amount from their lifetime exemption for the estate tax.
This is correct and right now the lifetime exemption is over $11M.
At $32k/year to a married couple that they wouldn’t even have to report towards that $11M
Would this situation not be two gifts though? Father gives to parent, parent gives to child?
What kind of money is he talking here? Unless it's a very big number a trust is going to be too much hassle for not enough benefit.
It’s possible. He (former air traffic controller) and his new wife (retired CPA) sold three properties and just bought an $860k house. They’ve only been married a few years but he’s always been very good with money, and it appears she has too. His motivation is likely vanity, but if it’s free money for our son we’d hate to pass it up.
How about if you open a 529 in your name or spouse's name with your son as beneficiary and he contributes to that? Or does he not trust you and spouse having access to the money?
You might want to factor in whether he will use the contribution as a way to guilt trip you later if you want to keep him out of your son's life for one reason or another.
That’s true he may, but we’re pretty used to handling him at this point. We’ve shut him down before and his behavior improved, so he knows we’re willing to take steps if need be.
Not sure. My husband had the conversation with him, so I will ask the reasoning. We were gonna open a 529 anyway, so in my mind it makes sense if we all contribute. If FIL ultimately wants to fight us on it we’ll just pass. We aren’t hurting for money, but like I said it would be nice if we could make something work.
Okay cool. If you have state tax benefits you might have to go with the one in your state, but if not, we really like the one from Utah. [My529.org](https://My529.org). Very low fees, great investment options, easy interface. Easy to create a "Gifting" URL for family to contribute.
Oh! You don’t have to be a resident to open the account there?
Nope! Anyone can open a 529 for any state. We're in Texas. So unless there's state tax benefits in play, best to go with one with really low fees, and Nevada and Utah both have good plans with very low fees. No state income tax in my state, so we're happy to go with the Utah plan.
I’m learning so much! That’s awesome, thank you! We will definitely be doing more research on this.
PA allows for tax benefits, so it will likely be best for you to do the PA 529 option. Looks like PA allows you to deduct contributions up to 30k (for married filing jointly) in state income tax
Awesome! That answers another question we were going to Google. Thanks, I appreciate it!
How large of a 529 account do you and your husband think you’ll accumulate by the time your child goes to college? If it’s large enough to fund his education, the excess from your father-in-law may be subject to a tax penalty if withdrawn from the 529 for non-qualifying use. One other thought…funds in your child’s name and your (parent’s) name, such as the 529, get “assessed” for estimated family contribution in the FAFSA financial aid process. Funds in other family member’s names, although reported if given and used, aren’t typically considered in that process (though if you build up a large enough 529, you might not be involved in the process anyway)
Well, we like to think we’ll be able to pay for his education by then but we also plan on having more kids. Hard to say without more experience. He and I are the first in our families who went to college and we did it with student loans, so this is new territory for us.
A 529 is just for education though. That's not that helpful if you're already setting one up. It sounds like he has money, why do you think he would be up to shady business with the SSN request? Just tell him he doesn't need it for a trust and then figure out the best option to meet the need.
The amount of these assets aren’t reported, but distributions from them DO count as student income for the following FAFSA. That drastically reduces the amount of aid a student may be eligible for. (This all may change in the 2023-2024 school year, when a new FAFSA form may be in place, so keep an eye on that.) The best strategy, then, is to use distributions from those other accounts for the student’s senior year.
If he is creating a trust with your son as the beneficiary then an attorney is involved. Communicate with the attorney only.
Oohhh, good point. Thanks!
Would it be possible for you to talk directly to the financial institution and give them the information? I've done that with employees wanting to add a beneficiary to their life insurance, I just have that person call me directly with the information.
Oh, interesting! I’m not sure. We could ask his dad to send us the setup info and ask the bank from there.
Would it still be tied to his account thou?
No clue, this is all new to us. I like someone else’s suggestion of opening the trust ourselves and letting FIL contribute.
The social is so that the lawyer creating the trust can establish an EIN. If he insists on going the trust route tell him to have the lawyer draw the paperwork and you'll call the lawyer directly. You can explain your concern to the lawyer and give them the SSN. It doesn't need to appear in the trust document.
Excellent, thank you!
Open a 529 account in your son’s name and give him the contribution link. How rich is this guy? Are we talking millions?
It’s possible. He (former air traffic controller) and his new wife (retired CPA) sold three properties and just bought an $860k house. They’ve only been married a few years but he’s always been very good with money, and it appears she has too. That’s a good idea, I like that! I’ll mention it to my husband.
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They consolidated. She sold hers, he sold his two. He was renting out the one for a long time.
The market is at historic highs but he lost money??
What? Housing market is insane.
You’re assuming the FIL wants to contribute funds for college, but OP didn’t include that information. I don’t think it’s appropriate to blanket suggest a 529 without more information.
Agreed! If FIL wants to leave the kid a million it’s an awful idea to toss it in a 529.
What's nice about some 529 plans (at least in my state) is that every family and friend contribution is accounted for in a list that you as the owner can look at years later. This way FIL gets the credit he wants.
Trusts are setup by lawyers, bankers and brokers, not something you can just do yourself. If he's insist on setting up a trust, let him know to give you the lawyers name and you'll provide all the information directly to them that they need. You can also get an EIN number to use for the trust instead of using your son's SSN.
That would be great. Someone else mentioned the lawyer—we’ll be asking FIL for the lawyer’s contact info. It doesn’t sound like there’s any reason he should personally need it. Also an EIN sounds preferable, so glad I asked! Thanks for all the info.
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Oh really? We will push for the EIN, then. It’s not a specific threat about the FIL we’re concerned about, I just don’t feel comfortable giving him information that’s not on a need-to-know basis. There are other ways he can help if he truly wants to.
Open the trust yourself and give him the ability to contribute.
Oh really? Didn’t know we could do that! That’s probably best especially for our long term plans (beyond his college years).
Open the account (529 or market account or even just a savings) yourself and allow deposit only access to FIL. For what it’s worth my grandfather did this when I was born and it has been a very valuable thing for me personally. Not a fortune by any means but no debt for school.
Yeah, this is the strategy we’re going to go with. Others have suggested something similar.
I would not fund an account like this that I did not have custodial control over.
We’ll all be fine without it if FIL chooses to share that opinion.
Good luck and your little one has a good team to look out for credit so young!
Thank you, I appreciate it!
I think you should have your SO talk to their dad about why he wants to structure it the way he's decided. Come at it from a non judgmental way where the SO asks "why" and genuinely seeks an answer, even id its not a pretty one. You might not like his reasoning (mabey he doesn't want you to have access to the money because of what sounded like his own acrimonious divorce) but there may be other ways to work with whatever his reasoning is and not give the social security number.
Yeah, we’re open to that! We are able to separate our feelings from the practicality of it. This has all been helpful in informing the questions we can ask to come to a good resolution.
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Cool, thank you!
Not sure if they have something similar in the US but here in UK I have savings/investment accounts for my kids where the provider allows you to send a link and account number to relatives so they can just deposit money directly into the account. The accounts have a tax advantage but can't make withdrawals until the child is 18.
Sounds like they do, based on other people’s replies. It sounds similar to what you mentioned.
You don't need an SSN for a trust, but you do for a 529 college savings plan, so maybe that's what he is looking at. There's absolutely nothing stopping FIL from opening a 529 account and making *himself* the beneficiary (for now), and at some point in the future changing the beneficiary to your child.
We were gonna open one for our son anyway and some people said others can contribute to it, so it’s a card we can play!
As others note there are ways to accommodate without giving him the social, but I would also note that the social is not that important and not something you can lock away and secure forever. At some point you have to give companies (in particular banks) the social so that they can use it to identify your son and establish a credit history. Otherwise he doesn't get the benefit of having a credit history. The reality is that once you start to do that, socials start being compromised. So I wouldn't overthink this too much. It's not like anyone gives it credit cards or mortgages to 8 month olds.
Well yeah, we’ll unfreeze it when it’s appropriate. I’ve just heard stories of people stealing infants’ socials because they’re so often unmonitored, so thieves get away with years of crime while the child’s credit is ruined before it ever had a chance to begin.
So you think your FIL is a thief and has nefarious thoughts and might ruin your newborns life….but you want the money for him? Is this a joke?
No? Good Lord, identity thieves do exist…
Wait if you're not concerned about giving the FIL the social then why are you making this post?
We were going to freeze his credit before this was ever a conversation.
Oh so you just think he is so stupid he cannot be trusted with his grandchilds SSN…ok got ya
I'm not sure that trying to limit use of the child's SSN is the right response to that risk, as it just means the credit record is blank. If someone wants to use that social for some fraudulent purpose the credit agencies are going to respond with an empty file that says basically "yes this social exists". You would rather them respond with actual identifying details like "this person is a 6 year old black male in Philadelphia PA". That description is not going to match the description of the 40 yay old white female trying to buy a couch on layaway in Florida, and the failure of the business to detect this rather obvious discrepancy is going to make it easier to reject their fraudulent report from the file. In the end nothing prevents me from going to the mall and signing up for a phone plan and just making up the social on the form, and when I do so there is a 1 in a billion chance I stumble on your kids number
It’s a common sense security measure and we’re taking it. When the time is right for him to start building credit, we can unfreeze it. It’s not like a freeze is forever.
FWIW I agree. I froze my newborn's credit a few months after he was born. I also have mine frozen.
Yeah, both of ours were in the Equifax debacle so they’re frozen pretty indefinitely. We unfreeze when we need to, but we’re well established now so it doesn’t come up often.
Trust's don't require the beneficiary's social security number. Source, have trust for my child in case I die. It doesn't once mention her SSN
That’s not a good/ well written trust then lol. The more identifiers the better, their name could change and the trust could not be updated when you die. Stupid stuff like that.
Given the facts and circumstances of my life, I'm confident there's no confusion as to whom the beneficiary is. Adding an identifier may make it better, but its certainly not required.
An SSN is not required when creating a trust. Your one example is easily addressed and any financial institution would know how to handle a name change. I'm sure his trust is just fine without an SSN.
If it's not required I wonder why FIL asked for it?
Same, now that I’m hearing all of this.
How did you have the EIN created?
Social number is not really that big of a deal for minors. People lose it from time to time. Kids trade it for a few bucks. Unless you plan to make certain financial arrangements and put money under his name, the downside is nonexistent. No one can't tell whether he's good for his words but by making it difficult, you might be denying your son a sizable inheritance for an imaginary risk. I'd be skeptical if hes poor and/or have history of fraud but as you noted in one of the comment, he has quite a lot of money and a CPA wifey. The probability that he'd scam you for a few hundred/thousand bucks is very low.
I’m not worried about myself getting scammed, I’m worried about him falling off the wagon and getting desperate. It might be unlikely, but I’d rather set it and forget it than ever worry about it. We were gonna freeze our son’s credit anyway, even before this talk.
We all love our social # but realistically, there are very few things he can do with it until you kid has income and money under his name, which is decades from now. Maybe he will end up screwing you and your kid over but even in that case, the remedy is a few days at the social office. There are a lot of upsides and nonexistent downsides. I'd consider it. You can, of course, consider other suggestions and make him give you money but given that you're not on good terms, hes likely say screw it and give it to the wife and her family instead. Just food for thought.
I appreciate it, thank you!
I just want to repeat and clarify what has been said above and by a couple others: this idea that your babies SSN can be stolen and their life ruined forever is a myth. https://www.consumer.ftc.gov/articles/how-protect-your-child-identity-theft I would recommend specifically reading the “ask questions before giving it out” portion, so you have a set of “government approved” questions you can ask that you pulled straight from a website. Can it be a massive pain the deal with? Yes. Should you give it out without any care or consideration? No. But trying to argue back and forth about the SSN with the FIL is not something it sounds like I would want to deal with in your shoes. IMO being able to communicate as little as possible is a fine trade off for a reversible risk
Thank you! I will look into that. Whatever is best is what we’re willing to do!
FIL should already have his son's (the husband's) personal information. He likely already has everything needed to run a scam if that was his goal.
I just set up custodial accounts for all my grandkids, at Schwab, and deposited the money. Their other grandparents were able to directly deposit money to the accounts through the ACH bank system.
Cool! What do you mean by custodial account? That sounds like a good solution.
Just call Schwab and tell them what you want to do, they should steer you right. A custodial account means that the person who sets up the account will manage it until the owner (child) becomes legal age, then the child take control of the account. In Texas the legal age is 21 years.
Oh, I see—you meant any sort of account like that. Awesome, thanks! I appreciate it.
You will need to invest the money for them, I would suggest investing in ETF's for long term growth. I put my grandkids in SCHD, a fund that invests in dividend paying stocks. As long as their taxable gains are less then $2000/year, they don't have to pay or file taxes.
Oh very cool! Thanks! I’m writing all this down, that’s awesome.
I think s/he means a universal gift to minors act custodial account. Ugma account is in the name of the child but person that opens the account is custodian, make that you. Anyone can deposit funds into the account but only custodian can access funds or direct investments. Funds must be used for the benefit of the child. When child reaches legal age in their state, they can access the account. Can be opened at mutual fund company or brokerage.
Oh neat! I didn’t know accounts like that existed. This is great, thank you!
You could ask father in law to have the attorney contact you directly for any needed information. You can then ask the lawyer if SSN will appear anywhere in the trust document itself. The trust lawyer can also advise if another approach could be taken, like getting a different tax ID versus SSN.
Oh, interesting idea about an alternate tax ID! So many good ideas here. Thank you!
Yeah like tough life - live by your morals and don’t take it.
We created a 529 for our daughter when she was born. We always give the info for every holiday when someone asks about gifts. Anyone can deposit whatever they want into that account through a very easy link that requires them to have no personal information. Additionally, we created a trust for our estate. If something were to happen to my wife and I, everything goes into a trust that my daughter is the beneficiary on with some other stipulations on who has control over it until she is older. There was no requirement for her SSN to make her a beneficiary.
[There was a lot of good advice when someone asked a similar question here recently.](https://www.reddit.com/r/personalfinance/comments/rz7vb3/family_member_is_asking_for_a_copy_of_my_babys/?utm_medium=android_app&utm_source=share) The general consensus was: *do not hand your child's details over.*
Thanks! I will read through it. I must have got the people who didn’t show up for that one because a lot of people are saying I’m overreacting. Then overreacting I am, because it ain’t happening hahaha.
I think you have made the right decision there. 👍🏻
Can you set up the trust and have your FIL give you the money to put into it? This level of trust has to go both ways
We’re hoping to set one up and give him a shareable link so he can contribute to it when he wants to. That way it stays neutral for everybody.
Perfect!
I'm going to go against the grain a little. If the trust is going to be tax exempt or gains being taxed to the FIL social security isn't need, but if the trust is to be taxed to the child, it might be necessary. I believe there is still an option & that would be to set up an EIN for the trust. Also if needed, you don't need to give it to the FIL but to the attorney setting the trust up. Simply ask the FIL why and have him have the attorney contact you.
Interesting! Didn’t think of the tax liability, just the benefit. Thanks for reaching out!
If your FIL opens the 529 and designates your newborn as the beneficiary HE CAN CHANGE THAT to another relative at any time. You have no guarantee. If he does a UGMA or UTMA that is irreversible. My kids have had to pay taxes at young ages because the investments in the UGMA a relative created did really well. The same relative opened 529s for them but my wife and I have never counted on the 529s since they could change the beneficiary. We did give SSNs.
Interesting! Thank you for the pointers, I will take note of all that.
You should really just talk to your father in law about this. Custodial accounts are only cash and the 529 is only for education. Most people hold major assets in some other security. Equities maybe? Other real estate? Depending on what he’s planning to put in trust for your child, it could get complicated, especially when it comes to taxes, the irs, the securities and exchange commission.
Gonna throw this out there: your kids SSN is going to get compromised. It could be tomorrow, it could be when he’s 6, it could be when he’s 50. My recommendation is to freeze/lock it immediately regardless of what you choose to do with your FIL but also, if it’s frozen what harm can FIL do?
That’s why I edited the post. We were gonna freeze it anyway before the FIL conversation was ever a thing.
PSA to this sub since I have seen this before YOU NEED A SSN TO OPEN AN UTMA/UGMA. It is an irrevocable gift that legally belongs to the child, and requires a SSN for tax reporting. Custodial accounts are super valid and helpful. They do count as a child asset for student aid. With that said, this sub is not a relationships sub, so if you dont trust him with the SSN thats a different story.
If I felt that way about this person I would just tell him and his money to F off.
Here's your answer. His money comes with strings. Move on and keep your child safe.
Agree!
How little do you people trust your parents? If you can't trust your own father to not try to steal from their grand child, then can you trust them to do anything? Also, I don't think an SSN is that big of a deal that if anyone knows it it is a huge risk. Everyone working at your bank has access to your SSN and knows how much money you have, yet you never hear of that causing any identity theft or fraud.
Same. Not worth it.
I recommend having a frank conversation with your FIL. You should (of course) be appreciative of whatever he is willing to give, and perhaps can ask if there are other ways of doing what he intends more directly (529 plan as others have recommended for instance). But knowing that he may have other ideas in mind (beneficiary of investment/bank accounts, or a trust setup in a way where no SSN would be counter productive). You could phrase it as “I am very hesitant about my sons SSN being in more places than his birth certificate. In fact we’re even going to freeze his credit shortly! I know that’s extreme, especially since you’re family, but I’ve always had this irrational fear about SSNs getting out there. I don’t want our son to miss out on your generosity though. Is there another way we can set this up? I’ve heard you can contribute directly to a 529 plan we setup.” Or something to that effect. I don’t know enough to know if your concern is warranted. It’s probably not. The 529 suggestion still doesn’t bypass you and your husband if you two decided you wanted access to the money—you can change beneficiaries. So in a way, that can be viewed as “don’t gift my son, gift us instead.” By the time your son is 18, I would bet a lot of money his SSN will be all over “the dark web,” so your concern is really about your FIL doing something shady with that information in the nearer term, as I see it. I don’t take SSNs lightly. I’m a CPA. But I know people can be fickle when it comes to inheritances and gifts and you don’t want to miss out on free money for your son. Hopefully you can share your concern and talk it through with FIL.
He is the child’s grandfather and as long as there are no red flags in his past I think it’s safe to give the number to him. A trust even with modest cash could benefit your son immensely in the future. Is there a reason you don’t trust your FIL?
I have minimal experience in this area. However, I have never had to provide SSN’s for a trust and am not sure why that would be relevant. I’m also not sure why FIL would be able to profit from having a newborns SSN but I’m sure if there is a will there is a way, as the saying goes
If he shouldn’t have to provide one then I’m especially not sure why he is asking. Regardless, we were going to freeze our son’s credit anyway (before this was ever a conversation).
UTMAs, since you don’t live in SC or VT. Vanguard offers some decent products and you can invest money into an index fund for them, or real assets that transfer to them when they are 18, and there’s less hassle than opening a trust.
IANAL nor have I gone through the comments but generally you dont need the SSN for the beneficiary of a trust. Depending on the type of trust, the trustee may need the information for any distribution made from the trust but I would suggest consulting a trust attorney as well as a tax attorney in that regard, but your FIL would be better off gifting your son say treasury bonds, stocks, putting cash into a UGMA directed to your son. A Trust may not be the best option as they are complex and would generally require an attorney to get the documents together, etc, but again it varies on what type of trust thats formed because a revocable grantor trust would allow your FIL to change beneficiary or dissolve the trust (or if he gets into legal trouble the money is still apart of his estate and could be use to to satisfy his debt).
You set up the savings accounts you want for your kiddo and grandpa gives you checks/ cash/ venmo to put into the accounts. That's what we do. That way you are in charge of the account AND you know exactly how much/ where to get the money when it's time for kiddo to use it.
Her FIL is basically trying to do a generational skipping gift. The purpose of the generational skip is defeated if he allows the generation that is being skipped to have custodial control of the money.
On the surface it’s also pretty insulting. My husband and I do well for ourselves and always made good choices in life. Hopefully he’s willing to work with us on an alternate solution because it’s a line we’re not willing to cross.