Giftrust is an irrevocable trust to be established as a one-time gift to someone other than yourself or your spouse. As a long-term investment in the All Cap Growth Fund, the maturity date must be at least 18 years and no more than 65 years from the date the gift is made.

Advantages
  • The money stays in the account until the date designated by the person who gives the Giftrust.
  • A Giftrust account may be given to either a child or an adult.
Eligibility Grantor:
The grantor may only be an adult. However, there are circumstances in which a person may not be a grantor. For instance, the grantor may not be:
  • The beneficiary, beneficiary's spouse or alternate beneficiary
  • Anonymous
  • A minor; minors cannot enter into legally binding contracts, nor can they complete the Internal Revenue Service (IRS) forms required of Giftrust grantors
  • A trust, corporation, estate or other entity

Beneficiary:
The beneficiary must be a U.S. citizen or U.S. resident alien. There are no age restrictions. Once a beneficiary has been named, the grantor may not change the beneficiary. There are certain persons and entities that may not be beneficiaries of a Giftrust:
  • The grantor, grantor's spouse or alternate beneficiary (A beneficiary may not fund his or her own Giftrust by providing money to a grantor.)
  • Non-resident aliens-people who are neither U.S. citizens nor residents
  • Trusts, corporations, estates, charities and organizations
Minimum Initial Investment $2,500
Additional Investment Before maturity:
No additional investments are allowed.

After maturity:
Additional investments are allowed.
Withdrawals
  • Withdrawals are not allowed until the maturity date specified by the Grantor.
  • The maturity date must be at least 18 years and no more than 65 years from the date the gift is made.
Distributions Any capital gain distributions and/or dividends are paid in December of each year.
Taxability Anyone who contributes to a Giftrust must report all contributions on IRS Form 709 by April 15 of the following year.

When an account receives more than $100 in annual dividend and capital gains distributions from the fund, federal and state income taxes may be due. If so, the trustee will redeem the necessary number of shares from the Giftrust account and send the proceeds directly to the federal and state taxing authorities. Neither the Grantor nor the beneficiary needs to file an additional income tax return for Giftrust.

After the termination of the trust, the beneficiary will be responsible for paying any income taxes due. If the Giftrust matures on or after the beneficiary's 21st birthday, the beneficiary may owe additional "throwback tax". (Throwback taxes apply only to Giftrust accounts established prior to March 1, 1984.) Please consult your tax advisor for tax rates.
Service Fees For each tax year a Giftrust account earns more than $100 in annual distributions, the trustee assesses a $10 fee to help cover the cost of calculating and filing the appropriate federal and local tax returns. This fee is redeemed from the trust as an expense of the trust, not an expense of the Grantor or Beneficiary.
Secure Online Account Access Simply create a User Name and Password and Log In to:
  • View account balances
  • View Giftrust transaction summary
  • View statements
  • And more...

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 not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.