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This is self-dealing. You’re absolutely prohibited from making a payment that would be earmarked for the benefit of the child. Taking it a step further, you could have a program that is a completely merit-based scholarship where you have no control over it. If, for instance, the foundation automatically provides a “free ride” for the valedictorian of a particular high school and, through no fault of yours, your child happens to be valedictorian, they are not eligible to win that scholarship. Your children, your disqualified people, and your family members are not eligible for foundation grants, ever.