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Old 09-19-2014, 08:24 PM   #21
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Old 09-20-2014, 02:26 PM   #22
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I really have to disagree on that one. I am a co-trustee of my Dad's trust and other than initially establishing it the cost is nothing. I do the trust tax return each year and the K-1 but it is simple and takes less than an hour so even if you hire it out it would not cost that much.

Annuity interest rates are so low, the OP's friend would be much better off with a trust and plunking the money in Wellesley or a similar balanced fund.
Disagree if you like. Just as a starter, drafting of a trust of this nature would run probably $1,500 or more depending on location. Then there needs to be an independent trustee who will probably wish to be compensated. There is an annual tax return and possibly also a state return. There might be expenses in connection with managing the assets. Finally there are expenses in winding up the trust. Quite honestly, either idea is rather stupid but the SPIA is the better of the two.
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Old 09-20-2014, 02:28 PM   #23
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Do the investment companies review the terms of the trust every time a transaction is performed, or do they just ensure the identify of the trustee and rely on the trustee to keep compliant with the terms of the trust?

-gauss
No, it's not their responsibility to enforce the terms of the trust.
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Old 09-20-2014, 09:40 PM   #24
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Disagree if you like. Just as a starter, drafting of a trust of this nature would run probably $1,500 or more depending on location. Then there needs to be an independent trustee who will probably wish to be compensated. There is an annual tax return and possibly also a state return. There might be expenses in connection with managing the assets. Finally there are expenses in winding up the trust. Quite honestly, either idea is rather stupid but the SPIA is the better of the two.
Bruce
Then we'll agree to disagree. My actual experience managing a trust (and doing the tax returns) have been much different.
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Old 09-20-2014, 11:50 PM   #25
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Then we'll agree to disagree. My actual experience managing a trust (and doing the tax returns) have been much different.


That is because you are one smart cookie.... not the OP... and probably the OP does not have someone that would do it for him 'free'.... so that leaves a bank which will charge fees that can get pretty high... and they will pay a firm to do the tax return.... again high....

So I will go with MBMiner on this... most people will pay a lot of money if they set up a trust and do not run it themselves....


Edit to add.... I am actually a trustee on a trust my mother set up... but it is beyond simple... I do not have to do anything... it will only be funded upon her death and a death payout from her annuity...
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Old 09-21-2014, 09:32 AM   #26
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Then we'll agree to disagree. My actual experience managing a trust (and doing the tax returns) have been much different.
You've managed a trust. I've managed thousands of trusts as a lawyer and an executive of major trust companies my entire career of 35 years. I'm telling you, a trust in this situation will cost far more than an SPIA.
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