Irrevocable Trust funds allocation for Mom

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Topic Author
nyetknish
Posts: 2
Joined: Sun Sep 08, 2019 3:35 pm

Irrevocable Trust funds allocation for Mom

Post by nyetknish » Sun Sep 08, 2019 4:07 pm

I am the trustee for an irrevocable trust that we set up for my 89 y.o. mother. BLUF: We expect that the funds will outlast her, and need advice about where the money should be invested. Here are the details: Mom is in relatively good health, we are assuming she will live the better part of 10 more years. She has long term care insurance. We are 3 siblings, ages 68, 65 and 52. Here are the numbers:

Monthly expenses: 3266
Social Security monthly income: 1361

Trust:
576,000 in savings accounts
55,600 in municipal bond account, at approximately

So, based on these assumptions, her expenses exceeding her SS income for 10 years would total 228,600, leaving 403,000 in the trust, not counting any interest accrued.

How should we be investing this money to give us the best combination of security for Mom, and return for the siblings when she passes? Thanks in advance for your help.

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ResearchMed
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Joined: Fri Dec 26, 2008 11:25 pm

Re: Irrevocable Trust funds allocation for Mom

Post by ResearchMed » Sun Sep 08, 2019 5:01 pm

nyetknish wrote:
Sun Sep 08, 2019 4:07 pm
I am the trustee for an irrevocable trust that we set up for my 89 y.o. mother. BLUF: We expect that the funds will outlast her, and need advice about where the money should be invested. Here are the details: Mom is in relatively good health, we are assuming she will live the better part of 10 more years. She has long term care insurance. We are 3 siblings, ages 68, 65 and 52. Here are the numbers:

Monthly expenses: 3266
Social Security monthly income: 1361

Trust:
576,000 in savings accounts
55,600 in municipal bond account, at approximately

So, based on these assumptions, her expenses exceeding her SS income for 10 years would total 228,600, leaving 403,000 in the trust, not counting any interest accrued.

How should we be investing this money to give us the best combination of security for Mom, and return for the siblings when she passes? Thanks in advance for your help.
How much LTC insurance does she have, and how much per month max in benefits?
And what are the costs for, say, full skilled nursing care in a facility you would want to place her in, and maybe some extra care on occasion... it's hard to predict actual needs...

RM
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Gill
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Re: Irrevocable Trust funds allocation for Mom

Post by Gill » Sun Sep 08, 2019 5:56 pm

The municipal bond fund doesn’t seem appropriate in this situation. Consider switching to a taxable bond fund.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

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LilyFleur
Posts: 485
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Re: Irrevocable Trust funds allocation for Mom

Post by LilyFleur » Sun Sep 08, 2019 6:08 pm

ResearchMed wrote:
Sun Sep 08, 2019 5:01 pm
nyetknish wrote:
Sun Sep 08, 2019 4:07 pm
I am the trustee for an irrevocable trust that we set up for my 89 y.o. mother. BLUF: We expect that the funds will outlast her, and need advice about where the money should be invested. Here are the details: Mom is in relatively good health, we are assuming she will live the better part of 10 more years. She has long term care insurance. We are 3 siblings, ages 68, 65 and 52. Here are the numbers:

Monthly expenses: 3266
Social Security monthly income: 1361

Trust:
576,000 in savings accounts
55,600 in municipal bond account, at approximately

So, based on these assumptions, her expenses exceeding her SS income for 10 years would total 228,600, leaving 403,000 in the trust, not counting any interest accrued.

How should we be investing this money to give us the best combination of security for Mom, and return for the siblings when she passes? Thanks in advance for your help.
How much LTC insurance does she have, and how much per month max in benefits?
And what are the costs for, say, full skilled nursing care in a facility you would want to place her in, and maybe some extra care on occasion... it's hard to predict actual needs...

RM
And, is there a provision in the LTC care policy about a waiting period in which you pay out-of-pocket before benefits commence?
It would be good to take a good look at the policy. My parents had two different LTC policies but toward the end one parent's care was $15,000/month; I think after the policies paid it was about $10,000 out of pocket.

AvidGardener
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Joined: Sun Mar 03, 2019 11:20 am

Re: Irrevocable Trust funds allocation for Mom

Post by AvidGardener » Sun Sep 08, 2019 9:25 pm

My aging parent's mid six figure Living Trust portfolio current AA is 24% stock/ 6% International/ 51% VBTLX Total bond +CDs/ 19% Cash in HYS account paying 2.4% and two Rewards checking accounts earning 3% and 4%

22twain
Posts: 1994
Joined: Thu May 10, 2012 5:42 pm

Re: Irrevocable Trust funds allocation for Mom

Post by 22twain » Mon Sep 09, 2019 12:23 am

nyetknish wrote:
Sun Sep 08, 2019 4:07 pm
BLUF: We expect that the funds will outlast her,
BLUF? :confused

[added] OK, I did a Google search: "Bottom Line Up Front". I swear this is the first time I've ever seen this FLA (Four Letter Acronym), although I've been reading this forum for more than seven years. :annoyed
Last edited by 22twain on Mon Sep 09, 2019 12:30 am, edited 1 time in total.
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ivk5
Posts: 812
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Re: Irrevocable Trust funds allocation for Mom

Post by ivk5 » Mon Sep 09, 2019 12:28 am

22twain wrote:
Mon Sep 09, 2019 12:23 am
nyetknish wrote:
Sun Sep 08, 2019 4:07 pm
BLUF: We expect that the funds will outlast her,
BLUF? :confused
https://lmgtfy.com/?q=BLUF

123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: Irrevocable Trust funds allocation for Mom

Post by 123 » Mon Sep 09, 2019 12:30 am

22twain wrote:
Mon Sep 09, 2019 12:23 am
nyetknish wrote:
Sun Sep 08, 2019 4:07 pm
BLUF: We expect that the funds will outlast her,
BLUF? :confused
Bottom Line Up Front (this is the first time I've come across this abbreviation)
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Topic Author
nyetknish
Posts: 2
Joined: Sun Sep 08, 2019 3:35 pm

Re: Irrevocable Trust funds allocation for Mom

Post by nyetknish » Mon Sep 09, 2019 10:32 pm

Sorry about the "BLUF" acronym, I work for the military... it's common in their communications. I believe the LTC insurance will pay 8K/month. She is living independently now, will move in with my family when she needs to, we will bring in help if necessary, the LTC insurance covers that, and only put her in skilled nursing if it comes to that.

Kagord
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Re: Irrevocable Trust funds allocation for Mom

Post by Kagord » Tue Sep 10, 2019 8:22 pm

Irrevocable Trust Trustee, you have a fiduciary responsibility to all beneficiaries (present and future), what are the rules of the trust, I.E. income only? principle preservation? Sounds like there's no medicaid protection needed with LTC listed, why does the trust exist, is it a medicaid trust? My 2 cents, have it reviewed by an estate/probate attorney in the state the trust was created for full understanding of what you are actually responsible for. The trust may state you can be reimbursed for this cost from the trust. If there's good communication between siblings, it may not be an issue, regardless, I would provide an annual accounting to your mother and each sibling so there aren't any surprises, they are entitled to this.

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