Inheritance - $300,000 trust

[pfalvey]

I have inherited 50,000 cash and $300,000 in a trust. I've been told by the trustee that it can pay for anything from rent and utilities to spending money. My initial reaction is to bleed the the trust as much as I can and feed it to the $50,000 that I own outright. What are your thoughts?

It's a care and comfort trust, what's the best way to ask for the maximum distribution of the trust?

Thanks in advance
P. S. My yearly income is $15,000-16000

[Nutria]

Of course your instinct is to burn through 22x your current income on hookers and blow. That's completely understandable. Too bad coke is highly addictive, and more two-legged parasites are going to latch on to you than leeches onto a Marine in a particularly nasty Vietnamese swamp.

That out of the way...

• How old are you?
• How much education?
• What do you want out of life?
• How much debt do you currently have?
• Will you give me some?

[bjl584]

Your post is frightening, especially on a frugal minded forum like this.

You have a wonderful start to life. That trust could be worth a million dollars by the time you are 40 (I am assuming that you are young), and you are asking how to get a hold of as much of the money as possible as quickly as you can.

I would advise that you take a step back, come up with a long term plan, maybe talk with a financial advisor. But, I fear that you are going to blow through the entire $300,000 in 3 years or less.

[rennigade]

Do whatever you want with it...its your money. You're not going to take the advice that anyone gives you here so there is no point chiming in. Have fun.

[pfalvey]

Ok..... I am 48 years old with the only debt I have is about $5,000 left to pay in student loans. When I say I want to bleed the trust, it's so I can have some financial independence and also add to the 50,000 lump sum. My fear is that the trust will be very conservative in distributing the trust....which is why I to maximize the distributions.

[Nutria]

Ok..... I am 48 years old with the only debt I have is about $5,000 left to pay in student loans. When I say I want to bleed the trust, it's so I can have some financial independence and also add to the 50,000 lump sum. My fear is that the trust will be very conservative in distributing the trust....which is why I to maximize the distributions.

Given your age, salary and the fact that this website is SavingAdvice.com not HowtoBleedTheTrust.com, I'm not eager to think up ways to do so.

[Petunia 100]

This is your chance to set up some nice financial security for yourself.

Is your 15k-16k of income "earned income"? Meaning it is from w-2 income, self-employment income, or alimony? If so, you can certainly take a distribution from the trust and max an IRA (5.5k for those under age 50 in 2016).

Do you own your home? If yes, do you have a mortgage? If not, do you want to own a home?

What are your plans for the 50k?

Definitely pay the student loan in full. You have the cash on hand so just be done with it.

Edit: The trust may have quite a lot of fees to pay, depending on how the trust is set up, administered, and how the assets are invested. Do you know any of those details?

[sv2007]

I have inherited 50,000 cash and $300,000 in a trust. I've been told by the trustee that it can pay for anything from rent and utilities to spending money. My initial reaction is to bleed the the trust as much as I can and feed it to the $50,000 that I own outright. What are your thoughts?

It's a care and comfort trust, what's the best way to ask for the maximum distribution of the trust?

Thanks in advance
P. S. My yearly income is $15,000-16000

I'm not too familiar with trusts as wife handles that area, but I don't see some issues discussed and thought it may be relevant.

1. moving money out of the trust. While most here seems to think it's a bad idea based on the replies, I don't think it is necessarily bad. If you leave money in the trust, the remainder beneficiaries gets paid out after you die. If you moved that money out, you can decide how the remaining money go.

2. Maximum distribution: The best way is to just read the trust and figure out what's reasonable; or you can just ask the trustee since eventually it'll be him/her that decides. (Note that sometimes the trust will limit you to only its interest earnings unless something bad (e.g. low investment returns) happens. It should be spelled out in the trust.

3. You income. You need to consider tax consequences.

A few questions:
1. Who's the trustee?
2. Are you the only primary beneficiary ?
3. Have you read the doc? (lots of mismanaged trust)
4. What's the trustee's pay?

[sv2007]

Your post is frightening, especially on a frugal minded forum like this.

You have a wonderful start to life. That trust could be worth a million dollars by the time you are 40 (I am assuming that you are young), and you are asking how to get a hold of as much of the money as possible as quickly as you can.

I would advise that you take a step back, come up with a long term plan, maybe talk with a financial advisor. But, I fear that you are going to blow through the entire $300,000 in 3 years or less.

The thing with trusts is that many times, it isn't a good idea for the primary beneficiaries to let it grow because all that wealth will not be theirs at all.

[tripods68]

OMG.....I guess Vegas is open tonight!!!

Enjoy!

[TexasHusker]

I would get a new car.

[MakeAStash]

Sounds like it pays out for needs not wants, which means the grantor did not want the trust bled quickly. I'd consider it a form of annuity that can pay me for many years. Unless you have already completed saving for retirement, it will let you retire sooner provided you do not draw more than about 3% annually.

[snafu]

I suggest you ask the trustee for specific details, how long has the trustee been managing this account ? Ask for the investment details of the original contribution. What product[s], what percentages, investment purchase costs and ongoing management expense ratio ? How is the trustee paid and how much. If a percentage, what do they anticipate collecting in 2016. As you are not a teenager, what meets the draw down percentage criteria?


If you are willing to share those details here, there are very knowledgeable S A participants who can offer important suggestions.

[rennigade]

Not sure if anyone read OP's 2nd post but he's 48 years old and still has student loan debt. You can end this thread now and stop replying. That money is going to vanish in a short amount of time. I like texashunters idea...buy a new car...may as well.

[disneysteve]

My yearly income is $15,000-16000

I am 48 years old with the only debt I have is about $5,000 left to pay in student loans.

Why is a 48-year-old only making 15K/year and why do you still have student loans at your age?

I think we need more info about your overall situation before we can give any meaningful advice about how to responsibly handle this windfall. You could be set for life or you could blow it all pretty quickly if you aren't careful.