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This is one of those, "Is this even possible?" questions.

I'm envisioning beginning what I'm calling a Legacy Fund. The idea is for me to set aside a few dollars a month into a basket of low-cost diversified index funds, or something similar.

The purpose of this fund is not for my future use, or even for that of my son. Instead, I envision my son also contributing a few dollars a month once he starts earning his own way. Eventually, given enough time, the value of this Legacy Fund will become substantial. Letting compounding perform its slow but staggering magic, I picture my grand-children, or even my grand-children's grand-children, will have the resources to, say, obtain an education debt-free.

This is something I'd like to lay down for the benefit of my future descendants whom I'm certain I'll never meet. My hope would be that this would be something easy to begin and continue, but could have monumental impact for others down the line.

Some concerns I've considered:

1) Inflation. For the time being, I would expect to index the monthly contribution rate to inflation. If I begin at, say, $25/month, and inflation this year is two percent (need to find some official measurement), then next year's monthly contribution would be $25.50. And so on.

2) Taxes. Not sure about this one. My hunch is that if I keep it in a tax-free account like a Roth IRA then others won't be able to benefit from it easily. It might be better to just keep it in a taxable account and use the a portion of the previous year's earnings to pay the tax man. Yes, the account will grow more slowly. But this is not about a race against time, where the balance must exceed some magic number before I reach a particular age. NASA launches chemical rockets that burn hot for a few minutes, but they also have ion drives that burn slow and steady for years. Over time the ion engine will reach speeds that far surpass anything a chemical rocket can achieve.

3) Temptation. Sooner or later, I or my son or my son's children will look at the growing pile of money and get greedy. I expect I'd have to somehow protect the fund legally so that no one can touch it for, say, fifty years, or a hundred years. Even better would be some kind of penalty built-in--for example, if anyone dips into the money, the entire balance will be sent to the U.S. Treasury. Something to help others resist the temptation to use it for car repairs or a kitchen remodel or a vacation to Mars.

4) Someone would have to be Custodian, to pay the taxes, to calculate the next year's ongoing contributions, to find an alternative location for the money if, say, Vanguard goes bankrupt thirty years from now. There would also have to be some means of safeguarding the Custodian from #3 above.

5) Time limit. When can someone actually use the money? After 50 years? 100 years? If the money is intended for higher education, what if one of my great grand-children doesn't go to college? Or can't? Or dies before she can enroll? Etc.


I'm skeptical that I'm the first person to ever think of this, so either this is a common thing, or there are obstacles that I haven't thought of to make this a complete non-starter.

So, thoughts?
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