Do I need a trust?

I recieved an estate distribution from a deceased aunt in the form of a large check made out to me"in trust for " my son for college.

I am concerned about tax implications for me. I need to know if I must establish a trust account at a bank, or any other options for this money.

I realize the earnings will be taxable upon withdrawal but what about the principal?

I'm thinking a 3 year CD is best; it fits my timeline for my son starting college.

Any suggestions on how to proceed? I must preserve these funds!!

It really depends on what you mean by a "large" check. Essentially, it requires it you establish an UTMA account for your child (Savings/Investment/529). As to where it should go depends on the amount of the check. For example, you wouldn't want to put it all into a 529 if it will exceed expected costs for qualified education expenses, but any monies outside of the 529 will adversely affect your financial aid applications (FAFSA).

$100K and I already have a 529. I dont know what to do --all I have is the check

You can start the process and ease distribution to various vehicles by establishing a custodial savings account (UTMA) with check writing privileges at your local bank.

With a check that large, it will be highly unlikely that you will be eligible for any significant financial aid.

Will your 529 cover all of the estimated college costs? A new UTMA 529 would have to be established if you wanted to deposit any of these funds.

It's also important to understand that these funds will become fully available to your child at the ripe old age of 21. Does your child have any earned income yet? If so, you may want to start funding a Roth IRA each year.