Carol has been promoted several times, and she may be named a partner next year. Thus, she will be subject to higher marginal income tax rates than in the past. Carol's colleague Isaiah has told her about a "college education trust" from which he pays tuition and fees for his children. He has implied that there are sizable tax advantages to setting up a trust for this purpose.

Carol is considering establishing a similar trust to pay tuition for her own children. She believes that the trust will be able to deduct the tuition payments, something that she cannot currently do on her Form 1040. Write a memo for the tax research file addressing Carol's ideas.