MBMiner wrote:Answering only one part of your question, but which goes to the heart of your concern. There is a very easy way to avoid tax on the income earned in a trust - pay it out to a beneficiary. Income earned by the trust is only taxed in the trust when it is accumulated.
Can you explain this better? What's the difference between a trustee and a beneficiary?
He was saying that the trustee could pay out the income from the trust to OP's unborn children. Someone might have suggested opening 529 college accounts, if that's allowed, or you'd just have to wait until the children are born to take the income out of the trust and put it into each children's own accounts (bank accounts or minor accounts at VG or the like). If you were to do that, you'd still face low income thresholds before you get into the parents' income tax rates, but that might be preferable over the the trust's tax rates.
The trustee is the one who is charged with taking care of the assets in the trust, and in this case the trustee is not the grantor ('grantor' is the one who creates and funds the trust). The beneficiaries are the ones identified in the trust to receive the assets and/or income from the trust, the OP's children.
I'm no expert on this stuff so if I am off base on it, I'd appreciate correction/clarification, but I think that's pretty much it.
As to OP's original questions about AA, I wonder the same thing. But I've read enough threads to understand that some bonds actually improve returns, even with a super-long investment horizon. I would also agree not to get into alternative investments like land, at least not until the children get older and might take an interest in handling some of their own investments. By that time the assets should have grown considerably to make such alternatives more attractive, perhaps.