Financial planning when you know you'll be inheriting a trust

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't have much detail on the trusts other than they are generation skipping (from my grandparents to my sister and me) with my dad as executor (and yes even if my mom is still living it's contingent on my dad). They have their own money which will be passed to their grandkids if there's any left

This is a good idea. Sometimes I wish I were white.

Why do you assume OP is white? What does race have to do with this?

[Anonymous]

It sounds like he's the trustee, not executor. If your grandparents set up a GST, then you absolutely have the right to receive statements from the brokerage where the funds are held. If your grandparents have passed away, then you should be able to access the funds within reasonable limits. Generally, trusts are meant to pay for HEW: Health, Education & Welfare of the beneficiary. You should be using the funds for preschool tuition and nanny fees. Bring this up with your father so you can budget appropriately.

[Anonymous]

Anonymous wrote:HHI of around 140K with a toddler. Right now, dad stays home with the baby (some side income from consulting, but not his priority right now). Our income covers our needs but not much left over at the end of the day. We're in the process of looking at preschools and realizing tuition is going to require one adjustments. Intention is for dad to go back to working full time, but give current political environment, unclear how quickly that would happen.

Right now we save some for retirement, but not a ton. 10% of my gross automatically goes to a 401k (employer benefit). I don't add anything else right now. We add $2500 each to Roth's for both of us each year. At 30 and 35 we have about $180k in various retirement accounts right now.

We're not doing a 529 for the baby as her grandparents on both sides have started one for her and we expect through that college will end up fully paid for.

With that context, here's my question. I know we're behind with retirement. We just have no flexibility and will have even less when the baby goes to preschool... BUT I know I have a trust fund coming to me one my parents are gone (hopefully in many many years). I have no idea how much is in there but know it's probably at least $1M (each for my sister and me left to us by our grandparents).

How worried do I need to be about retirement given this? Should we work to get our budget down to save more for retirement or are we ok given the trust?

Should we prioritize saving for my husband in the off chance we would separate? We have a prenup detailing that the trust is mine so I don't want to leave him in a lurch... thoughts?

I'm confused. Are you saying the trust is only $1mm possibly? If so that's hardly enough to not contribute to retirement or 529s. I especially wouldn't limit my investments if I didn't understand the terms of the trust.

[Anonymous]

If op considers the $1m "front loaded" forced retirement savings, assuming it is wisely invested the it sure as hll should be plenty of retirement savings until op is in a position to contribute on her own. Op is only 30 and doesn't need to come up with college savings either!

And to the above poster who will inherit $6m in trust monies, I also can't imagine why you need to contribute a penny extra to your retirement. Esp since you also have college paid for by grandparents.

[Anonymous]

are you the primary beneficiary or the remainderman?

[Anonymous]

Anonymous wrote:It sounds like he's the trustee, not executor. If your grandparents set up a GST, then you absolutely have the right to receive statements from the brokerage where the funds are held. If your grandparents have passed away, then you should be able to access the funds within reasonable limits. Generally, trusts are meant to pay for HEW: Health, Education & Welfare of the beneficiary. You should be using the funds for preschool tuition and nanny fees. Bring this up with your father so you can budget appropriately.

HEMS trusts are usually set up so that the trsutee MAY distribute the funds but does not have to. Depending on the state and language of the trust, she may have a right for reports buy may not.

[Anonymous]

I would talk to your dad but also if money is tight I would immediately switch from a Roth to a traditional IRA-- the tax deduction will allow you to save more (or create other room in your budget).

[Anonymous]

Op, you need to get more details about the trust so you can make an educated plan, ignore the naysayers, you absolutely should have a financial plan that reflects the trust but you can do that without more information.

[Anonymous]

Anonymous wrote:It sounds like he's the trustee, not executor. If your grandparents set up a GST, then you absolutely have the right to receive statements from the brokerage where the funds are held. If your grandparents have passed away, then you should be able to access the funds within reasonable limits. Generally, trusts are meant to pay for HEW: Health, Education & Welfare of the beneficiary. You should be using the funds for preschool tuition and nanny fees. Bring this up with your father so you can budget appropriately.

This. Plus, are you already receiving interest from the trust? You should be getting regular statements, even if you don't have access to the funds yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't have much detail on the trusts other than they are generation skipping (from my grandparents to my sister and me) with my dad as executor (and yes even if my mom is still living it's contingent on my dad). They have their own money which will be passed to their grandkids if there's any left

This is a good idea. Sometimes I wish I were white.

Why do you assume OP is white? What does race have to do with this?

OP is definitely white.

[Anonymous]

Anonymous wrote:I would ask your parents for more info about the trusts for planning purposes. Our generation skipping trust does go to my dh and his siblings when his parents die and then to our children (and nieces and nephews ) when our generation dies. But his parents could use it up...or we could use it up and there would be nothing there even though it is set up to be passed.

And I married into the family...if we divorce I get nothing. If DH dies, his siblings control the trust until it transfers to the next generation. So, yes, if you have the ability to plan for your husband if something goes wrong, that would be smart.

How is this generation skipping?

[Anonymous]

I feel bad for anyone who has relatives trying to control them from the grave. When we did our trust planning, its 100% turned over by them time they are 40. I went in to the planning saying I will NOT be a parent that controls money after death.

[Anonymous]

Anonymous wrote:I don't have much detail on the trusts other than they are generation skipping (from my grandparents to my sister and me) with my dad as executor (and yes even if my mom is still living it's contingent on my dad). They have their own money which will be passed to their grandkids if there's any left

Just FYI, my grandmother left my sister and I similar trusts. Once my dad died, my aunt was the trustee. She didn't have to give us the money. I wasn't even allowed to see the trust without her permission even though I was a beneficiary. She is also trustee of a similar trust to which we are beneficiaries to when she dies. Trustees are allowed to use the money as they see fit before they die. My dad had every intention of passing it to us, but my aunt, who was widowed early, and had not much savings, had been very up front that she's using "my" trust for her living expenses. I would keep saving for retirement, and $1 million really won't be much in 30 years or so

[Anonymous]

Op needs to sit down with dad and get more detail on the exact setup of the trusr instead of asking all of us to speculate here.

[Anonymous]

Anonymous wrote:I don't have much detail on the trusts other than they are generation skipping (from my grandparents to my sister and me) with my dad as executor (and yes even if my mom is still living it's contingent on my dad). They have their own money which will be passed to their grandkids if there's any left

So your parents are leaving you nothing and it all to your kids/nieces and nephews? $1 million whenever they die, which hopefully is a long time since you are only 30, will not be enough.