$100,000 irrevocable trust

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50ftqueenie
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$100,000 irrevocable trust

Post by 50ftqueenie » Thu Jul 04, 2019 10:32 am

I'm very new to investing. I recently became the trustee for my parents' $100,000 irrevocable trust. I think I would like to have about 2/3 of it in long term tax efficient index funds (VTIAX and VTSAX), but would like at least 1/3 in something more liquid in case my parents need the money. Should I should put it in the money market? I was wondering about pros and cons of investing in bonds, either Total Bond Market versus municipal bonds. I live in a high tax state, fyi. Thanks so much for any advice!

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prudent
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Re: $100,000 irrevocable trust

Post by prudent » Thu Jul 04, 2019 10:40 am

Who are the beneficiaries of the trust? What does the trust say about disbursements?

Gill
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Re: $100,000 irrevocable trust

Post by Gill » Thu Jul 04, 2019 10:44 am

Are your parents the beneficiaries of the trust? What are the current assets of the trust? What is the duration of the trust? What is the purpose of the trust? Who is the remainderman (ultimate beneficiary) when the trust terminates? What does the trust say about investments? How old are the beneficiaries? Can both principal and income be used for the beneficiaries? Lots of questions before anyone can answer intelligently.
Gill
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neilpilot
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Re: $100,000 irrevocable trust

Post by neilpilot » Thu Jul 04, 2019 10:51 am

You want to put about one third of the trust in something "more liquid" than VTIAX and VTSAX? Both of these funds trade at high volume and can be sold and settlement available in a couple of days. Isn't that sufficiently liquid?

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ResearchMed
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Re: $100,000 irrevocable trust

Post by ResearchMed » Thu Jul 04, 2019 10:57 am

neilpilot wrote:
Thu Jul 04, 2019 10:51 am
You want to put about one third of the trust in something "more liquid" than VTIAX and VTSAX? Both of these funds trade at high volume and can be sold and settlement available in a couple of days. Isn't that sufficiently liquid?
Perhaps OP meant, instead of "liquid", some fund(s) that were not very volatile, so there wouldn't be "lows" when/if money was needed to be removed?
This may be likely, given the mention of bonds and money market funds.

RM
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delamer
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Re: $100,000 irrevocable trust

Post by delamer » Thu Jul 04, 2019 12:11 pm

If your parents have other investment assets, then the way the funds in the trust are allocated should take into account the allocation for those other investments (subject to any restrictions on the trust, of course).

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FIREchief
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Re: $100,000 irrevocable trust

Post by FIREchief » Thu Jul 04, 2019 1:05 pm

50ftqueenie wrote:
Thu Jul 04, 2019 10:32 am
I'm very new to investing. I recently became the trustee for my parents' $100,000 irrevocable trust. I think I would like to have about 2/3 of it in long term tax efficient index funds (VTIAX and VTSAX), but would like at least 1/3 in something more liquid in case my parents need the money. Should I should put it in the money market? I was wondering about pros and cons of investing in bonds, either Total Bond Market versus municipal bonds. I live in a high tax state, fyi. Thanks so much for any advice!
Are you certain this is an irrevocable trust? Did somebody else create the trust for your parent's benefit?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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50ftqueenie
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Re: $100,000 irrevocable trust

Post by 50ftqueenie » Sat Jul 06, 2019 7:58 am

Gill wrote:
Thu Jul 04, 2019 10:44 am
Are your parents the beneficiaries of the trust? What are the current assets of the trust? What is the duration of the trust? What is the purpose of the trust? Who is the remainderman (ultimate beneficiary) when the trust terminates? What does the trust say about investments? How old are the beneficiaries? Can both principal and income be used for the beneficiaries? Lots of questions before anyone can answer intelligently.
Gill
My sister and I are the ultimate beneficiaries of the trust split 50/50 when my parents pass away. My father is 67 and my mother is 60, and in relatively good health. My parents' personal home is also included in the trust. The ultimate aim of the trust, which the lawyer who drew up it up referred to as a "hybrid irrevocable/revocable" trust, is to ensure my parents do not have significant assets in their holdings. I anticipate that I will likely use a good portion of the holdings on their behalf while they are alive, as I do not believe they have enough for retirement. *yet to do the math* I am able to invest the principal and income any which way I see fit for the benefit of my parents. I can use any portion of the holdings for my parents' benefit at any time. Does this answer some questions or am I revealing my ignorance further? Right now, the money is in a Chase checking account. Either way, first time posting on this board and I'm so grateful that people are taking the time out to even consider answering.

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Wiggums
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Re: $100,000 irrevocable trust

Post by Wiggums » Sat Jul 06, 2019 8:01 am

Much more info is needed regarding the trust. Hopefully the OP will respond soon.

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50ftqueenie
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Re: $100,000 irrevocable trust

Post by 50ftqueenie » Sat Jul 06, 2019 8:04 am

ResearchMed wrote:
Thu Jul 04, 2019 10:57 am
neilpilot wrote:
Thu Jul 04, 2019 10:51 am
You want to put about one third of the trust in something "more liquid" than VTIAX and VTSAX? Both of these funds trade at high volume and can be sold and settlement available in a couple of days. Isn't that sufficiently liquid?
Perhaps OP meant, instead of "liquid", some fund(s) that were not very volatile, so there wouldn't be "lows" when/if money was needed to be removed?
This may be likely, given the mention of bonds and money market funds.

RM
Yes, that's exactly right. It's possible that the money will remain untouched for 15+ years, but I would like to be extra cautious with this money in case I need to use a portion for my parents' benefit in 5 or so years...

bsteiner
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Re: $100,000 irrevocable trust

Post by bsteiner » Sat Jul 06, 2019 1:05 pm

50ftqueenie wrote:
Sat Jul 06, 2019 7:58 am
... The ultimate aim of the trust, which the lawyer who drew up it up referred to as a "hybrid irrevocable/revocable" trust, is to ensure my parents do not have significant assets in their holdings. ... I can use any portion of the holdings for my parents' benefit at any time. Does this answer some questions or am I revealing my ignorance further? ...
It raises more questions than it answers.

What is a "hybrid irrevocable/revocable trust"?

Who created the trust?

rossington
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Re: $100,000 irrevocable trust

Post by rossington » Sat Jul 06, 2019 2:24 pm

50ftqueenie wrote:
Sat Jul 06, 2019 7:58 am
Gill wrote:
Thu Jul 04, 2019 10:44 am
Are your parents the beneficiaries of the trust? What are the current assets of the trust? What is the duration of the trust? What is the purpose of the trust? Who is the remainderman (ultimate beneficiary) when the trust terminates? What does the trust say about investments? How old are the beneficiaries? Can both principal and income be used for the beneficiaries? Lots of questions before anyone can answer intelligently.
Gill
My sister and I are the ultimate beneficiaries of the trust split 50/50 when my parents pass away. My father is 67 and my mother is 60, and in relatively good health. My parents' personal home is also included in the trust. The ultimate aim of the trust, which the lawyer who drew up it up referred to as a "hybrid irrevocable/revocable" trust, is to ensure my parents do not have significant assets in their holdings. I anticipate that I will likely use a good portion of the holdings on their behalf while they are alive, as I do not believe they have enough for retirement. *yet to do the math* I am able to invest the principal and income any which way I see fit for the benefit of my parents. I can use any portion of the holdings for my parents' benefit at any time. Does this answer some questions or am I revealing my ignorance further? Right now, the money is in a Chase checking account. Either way, first time posting on this board and I'm so grateful that people are taking the time out to even consider answering.
Is the home part of the $100,000 you mentioned?
Like everyone else just trying to determine what all is involved here.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.

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ResearchMed
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Re: $100,000 irrevocable trust

Post by ResearchMed » Sat Jul 06, 2019 2:53 pm

panine wrote:
Sat Jul 06, 2019 2:35 pm
50ftqueenie wrote:
Sat Jul 06, 2019 7:58 am
Gill wrote:
Thu Jul 04, 2019 10:44 am
Are your parents the beneficiaries of the trust? What are the current assets of the trust? What is the duration of the trust? What is the purpose of the trust? Who is the remainderman (ultimate beneficiary) when the trust terminates? What does the trust say about investments? How old are the beneficiaries? Can both principal and income be used for the beneficiaries? Lots of questions before anyone can answer intelligently.
Gill
My sister and I are the ultimate beneficiaries of the trust split 50/50 when my parents pass away. My father is 67 and my mother is 60, and in relatively good health. My parents' personal home is also included in the trust. The ultimate aim of the trust, which the lawyer who drew up it up referred to as a "hybrid irrevocable/revocable" trust, is to ensure my parents do not have significant assets in their holdings. I anticipate that I will likely use a good portion of the holdings on their behalf while they are alive, as I do not believe they have enough for retirement. *yet to do the math* I am able to invest the principal and income any which way I see fit for the benefit of my parents. I can use any portion of the holdings for my parents' benefit at any time. Does this answer some questions or am I revealing my ignorance further? Right now, the money is in a Chase checking account. Either way, first time posting on this board and I'm so grateful that people are taking the time out to even consider answering.
[OT comment removed by Moderator Misenplace]
:confused

I haven't sensed that in general on BH, and certainly not on this thread.
There's just a lot of confusion about the nature of this trust, and without more information, it's difficult (or impossible) to give useful suggestions.

But that has nothing to do with who the OP is!

RM
This signature is a placebo. You are in the control group.

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