This strategy and accompanying document is 31 indexed pages and has great importance in three areas: 1) Lawsuit protection, 2) Income tax reduction through income spreading, and 3) Estate planning.

LAWSUIT PROTECTION . . . The assets held in this kind of trust are, in most cases, immune from lawsuits, judgments and bankruptcy of the parents or other Trustors or creators of this trust. Be advised that you reduce protection if a parent or a blood relative is the trustee of this kind of trust.

INCOME-TAX ADVANTAGES . . . Place assets such as computers, office furniture, etc., into the Children's Trust and then lease back the equipment to the parents' business. The children have income (major advantage if children are age 14 or older) and the parents' business has deductions. See your tax accountant for the amount of lease payment that can be charged to the parents' business--you'll be pleasantly surprised at how high this amount can be as a percentage of value.

ESTATE PLANNING ADVANTAGES . . . Any assets owned by the Children's Trust are generally outside the taxable estate of the parents.

Be advised that you limit this advantage if a parent or blood relative is the trustee.