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On January 1, 2005, a law took effect in the state of Missouri, where Giftrust® accounts are administered, that permits the early termination of Giftrusts without court involvement, if certain conditions are met. Before passage of this law, individuals who wished to terminate a Giftrust prior to the end of its term were required to obtain a court order, a potentially time-consuming and costly process. Under current law, the Giftrust trustee is authorized to accept joint instructions from a grantor and all beneficiaries to terminate a Giftrust before its original maturity date. A special form, the Giftrust Early Termination Form , must be completed for this purpose, or call one of our Investment Consultants at 1-800-345-2021.
All Giftrust beneficiaries, primary and alternate, along with the Giftrust grantor, must consent to terminate the trust by completing the Giftrust Early Termination Form . If all parties agree that it is in the best interest of the primary beneficiary to terminate the trust, the proceeds will go directly to the primary beneficiary, or to an account for the primary beneficiary's benefit.
If a beneficiary is a minor, then a parent must represent the child's interests. These proceeds may be invested in an American Century Investments mutual fund as a Uniform Gifts to Minors Act or Uniform Transfers to Minors Act (UGMA/UTMA) account. The proceeds may also be invested in a Learning Quest® 529 Education Savings Program account. If the primary beneficiary is an adult, the proceeds can be reinvested into an American Century Investments account of your choice. One of our Investor Consultants can help you understand what account types we offer.
If the grantor and all beneficiaries agree, you may redeem the American Century® Growth Fund shares in the Giftrust account and receive a check for the value of the account. If you are a minor, the check will be made payable to either the grantor or your parent as Custodian for you.
If the grantor of the Giftrust and the parent of a minor are the same person, he or she will still need to sign in both places on the Giftrust Early Termination Form . However, the parent's signature only needs to be notarized once.
If the grantor of the trust is no longer living, the Giftrust cannot be terminated through this process. At American Century Investments, the grantor is the person who actually established the Giftrust account and signed the original account application.
Yes. The primary and alternate beneficiaries must agree with the grantor in order to terminate the Giftrust before it matures. This must be documented on the Giftrust Early Termination Form .
No. You will need to complete and return a form for each individual Giftrust account whether all the accounts are registered under the same name, or whether they are registered under different names within the same household.
Yes. Most American Century Investments mutual funds have an initial minimum investment requirement of $2,500. If the value of your Giftrust account is less than the minimum investment requirement, you will need to make up the difference at the time you reinvest the proceeds into a new account.
Yes. There is a $10 fee any year a tax return needs to be filed by the trustee. The fee is also assessed when a Giftrust is redeemed, reinvested or terminated. The fee is automatically deducted from the account.
If you terminate the trust early, you will receive an IRS Schedule K-1 that will include any tax information that you must consider when filing your personal tax return. If you terminate your Giftrust in the year 2012, it will affect your 2012 tax return, which you file in 2013. In that case, you would receive an IRS Schedule K-1 in March 2013. If you redeem or reinvest your Giftrust proceeds, you also would receive a Form 1099-B in January 2013.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.