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Old 08-17-2016, 03:43 PM   #61
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It appears this thread, despite the title, substantially morphed into being about how to thwart Sis from getting an undue share of Mom's trust money as opposed to "Need suggestions for stable income."
Well, that IS the real crux of the problem, IMO.

As I noted, fix that and everything else falls into place.
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Old 08-17-2016, 03:52 PM   #62
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Yes that was the tile of the thread but in the OP's first post, he talked about the problems with Sis and later, the resentments, etc.

I agree with your analysis. At her age it should be close to a no brainer...unless of course the OP wants to have the bulk of the principle or a significant portion in tact at her death. I can certainly understand if that is the case and the OP does have to manage it for "the interests" of remainder beneficiaries as well-which includes SIS. If I were listed as a remainder beneficiary, I'd want as much left as possible while still taking care of Mom in the manner she is used to or expected.

That is why I either said something about the OP's goals or asked what his goals were. The advice given is different if he wants to have a million plus or more for remainder beneficiaries.

And I think he said he needed to get 4%. 4% of 2.5 million = $100,000 so it is likely a good portion of the trust will/may be in tact at her death. The Op obviously knows the value of money and is doing a good job taking care of mom while preserving principle.
Those would be my goals as well. It's just tough to find safe 4% anything these days.


Once Mom expires (technical term) the trust is immediately dissolved and left to her estate. I do no know how that is divided, as an estate lawyer handles that. Trying to remain impartial as possible, so I've not reviewed it.
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Old 08-17-2016, 03:55 PM   #63
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As for Sis, I love her dearly, however, she's an adult and there is no free lunch. I know she's banking on an inheritance; as is my older sibling and the grand children. I'm fine financially.


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Old 08-17-2016, 04:11 PM   #64
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Well, that IS the real crux of the problem, IMO.

As I noted, fix that and everything else falls into place.

What do you see the problem being? Between pension, SS and portfolio income, it should be easy to provide a nice income for mom close to forever. Income producing investments was the thread title, no?

Is it that mom and sis have to be informed that there will not be a lump sum coming for sis's "business education" and the possibility of a resulting family feud? That prospect would require comments with a different focus than OP's original call for investment advise/brain-storming.
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Old 08-17-2016, 04:21 PM   #65
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As for Sis, I love her dearly, however, she's an adult and there is no free lunch. I know she's banking on an inheritance; as is my older sibling and the grand children. I'm fine financially. ....
Too bad for Sis and other siblings, the point of the Trust is to provide for your Mother.

You say you don't know what your Mother spends the money on, well I'll bet a large portion of it is the free lunch for your Sister, (literally free lunches, plus pay credit card bill , buy her this and that, etc).
That is what is driving the desire for big lump sum of cash, a tiny voice in your Mom's ear.

And your handing over cash willy nilly is actually not being a good trustee, because the reason you are trustee is because someone believed Mom couldn't handle the money properly without blowing it all quickly.
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Old 08-17-2016, 04:27 PM   #66
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.....Which approach offers the highest lifelong, inflation-adjusted, monthly payment to her commensurate with the risks (risks of asset price volatility, longevity risk, default risks, etc).
That's the trick and a very difficult judgement to make except in hindsight.

The OP isn't obligated to guarantee that the beneficiary never runs out of money, if that were the case the only choice would be a SPIA. The OP is obligated to prudently invest the trust's assets considering the beneficiaries age, needs, etc.

I have a similar situation for my 85 yo Mom's trust, except she has other income sources that meet her needs so there are no real demands on the trust and it only distributes income since it has to. Given the circumstances, I invest the trust 60/40 since for all intents and purposes I am investing for me and my siblings who are the beneficiaries of the trust once Mom passes.
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Old 08-17-2016, 04:29 PM   #67
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Too bad for Sis and other siblings, the point of the Trust is to provide for your Mother.

You say you don't know what your Mother spends the money on, well I'll bet a large portion of it is the free lunch for your Sister, (literally free lunches, plus pay credit card bill , buy her this and that, etc).
That is what is driving the desire for big lump sum of cash, a tiny voice in your Mom's ear.

And your handing over cash willy nilly is actually not being a good trustee, because the reason you are trustee is because someone believed Mom couldn't handle the money properly without blowing it all quickly.


Agreed. Since Sis doesn't have a job, then Mom is paying for her stuff. This was why I originally only signed on to set everything up and then transfer it to an advisor. Due to the amount of the funds, the fees are a lot and would require selling shares in order to meet both Mom's and an advisors needs/fees. I did go to to advisors when I initially set everything up. I was told I am doing a good job and do not need their help. Then, I was also offered a consulting job lol. Very tough position I am in. I've told Mom several times, my responsibly is to the trust, not directly her needs. I do not know when she needs a lump sum. She doesn't even log into her bank account. The account has plenty of money in it. I think, after Dad past on, and she never managed money, she was scared. For a month or two, she was financially tight as only the SS and pension was coming in. The life insurance took a few weeks or so to receive. I had to lend her 10k to get by. She didn't like the situation.
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Old 08-17-2016, 04:31 PM   #68
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Once Mom expires (technical term) the trust is immediately dissolved and left to her estate. I do no know how that is divided, as an estate lawyer handles that. Trying to remain impartial as possible, so I've not reviewed it.
Are you sure about that? Typically, one of the benefits of a trust is that it bypasses probate... my parent's trusts state that once they die that the trust assets be distributed to their children (effectively bypassing probate).

If it is as you describe, perhaps it can be amended to bypass probate.
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Old 08-17-2016, 04:41 PM   #69
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Are you sure about that? Typically, one of the benefits of a trust is that it bypasses probate... my parent's trusts state that once they die that the trust assets be distributed to their children (effectively bypassing probate).

If it is as you describe, perhaps it can be amended to bypass probate.
I'm a little confused about some of this as well. I thought intl that you indicated the trust was available for medical and emergency dollars for beneficiaries other than your Mom. Is that just until your Mom is no longer around (sorry to put it this way) ?

Who is beneficiary of the trust? Now you say the Estate. So there are no remainder beneficiaries? The Trust is paid to the Estate governed by a Will? It is usually the other way around so it does bypass probate. Or perhaps her will sets up another Trust. Hence my being confused.

Don't really need to know but it is difficult to give advice not knowing goals or the structure of things. That said, I know you came here looking for investments so perhaps we leave it at that.
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Old 08-17-2016, 04:51 PM   #70
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I'm a little confused about some of this as well. I thought intl that you indicated the trust was available for medical and emergency dollars for beneficiaries other than your Mom. Is that just until your Mom is no longer around (sorry to put it this way) ?

Who is beneficiary of the trust? Now you say the Estate. So there are no remainder beneficiaries? The Trust is paid to the Estate governed by a Will? It is usually the other way around so it does bypass probate. Or perhaps her will sets up another Trust. Hence my being confused.

Don't really need to know but it is difficult to give advice not knowing goals or the structure of things. That said, I know you came here looking for investments so perhaps we leave it at that.


This is Dad's trust. When she expires, her will designates it to a separate trust; which then goes to the beneficiaries. Not sure why it is done like this, but that was how they set everything up.
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Old 08-17-2016, 05:05 PM   #71
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I've told Mom several times, my responsibly is to the trust, not directly her needs. I do not know when she needs a lump sum. She doesn't even log into her bank account. The account has plenty of money in it. I think, after Dad past on, and she never managed money, she was scared. For a month or two, she was financially tight as only the SS and pension was coming in. The life insurance took a few weeks or so to receive. I had to lend her 10k to get by. She didn't like the situation.
You are in a tough spot. I see your point about not spending money on an outside trust manager. We have had some difficult conversation with our kids about money, and now you are not only having to have the same kinds of conversations with your mom, you are going from the child role to parent role as well.

What if you kept control of the money in the trust and the physical buying and selling investments, but left the asset allocation decisions and budgeting help for your mom up to a third party, pay by the hour financial adviser? Then he or she can have the tough talks with your mom. Interest rates and dividends are what they are right now. You can tweak the trust AA between stock / bond / and maybe annuities, but there is only so much tweaking will get you in the current rate environment.
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Old 08-17-2016, 05:08 PM   #72
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I don't know (and don't need to) what else may be in your Mother's estate (other property?) but hope you are able to keep both your Dad's trust plus your Mom's estate under the 5.45 million which is the current Unified Tax Credit amount. (the amount beneficiaries get before tax kicks in) Above that and you guys will pay 45% of the excess over that limit to the federal government plus whatever your state may require but I am sure you know that already. And keep an eye on it as it may change. It was a million when my Mom passed and 2 million when my Dad passed. Typically tax is not paid when the first passes away. It is when the second parent passes away if the estate is above the UTC amt.

I assume your Dad's will did not take advantage of any of the Unified Tax Credit exemption. Again, don't need to know..rather I'm just making a statement.
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Old 08-17-2016, 05:55 PM   #73
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ok, after reading through posts I see mom gets $75K from trust, $13K from dads pension plus trust pays her property and school taxes of $15K. So, (exluding taxes), she has $88K, before SS which I would think is maybe another $20K? So she is getting over $100K but wants more than $120K? This is based on the comment about $10,000 per mo. isn't enough. Am I up to speed on this discussion or am I still missing something?
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Old 08-17-2016, 09:04 PM   #74
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You are in a tough spot. I see your point about not spending money on an outside trust manager. We have had some difficult conversation with our kids about money, and now you are not only having to have the same kinds of conversations with your mom, you are going from the child role to parent role as well.

What if you kept control of the money in the trust and the physical buying and selling investments, but left the asset allocation decisions and budgeting help for your mom up to a third party, pay by the hour financial adviser? Then he or she can have the tough talks with your mom. Interest rates and dividends are what they are right now. You can tweak the trust AA between stock / bond / and maybe annuities, but there is only so much tweaking will get you in the current rate environment.


I've tried this and they've suggested things I've already done. It this ultra low yield environment, there are little options when someone needs little risk.
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Old 08-17-2016, 09:04 PM   #75
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I don't know (and don't need to) what else may be in your Mother's estate (other property?) but hope you are able to keep both your Dad's trust plus your Mom's estate under the 5.45 million which is the current Unified Tax Credit amount. (the amount beneficiaries get before tax kicks in) Above that and you guys will pay 45% of the excess over that limit to the federal government plus whatever your state may require but I am sure you know that already. And keep an eye on it as it may change. It was a million when my Mom passed and 2 million when my Dad passed. Typically tax is not paid when the first passes away. It is when the second parent passes away if the estate is above the UTC amt.

I assume your Dad's will did not take advantage of any of the Unified Tax Credit exemption. Again, don't need to know..rather I'm just making a statement.

Significantly under that, so it shouldn't be an issue.
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Old 08-17-2016, 09:06 PM   #76
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ok, after reading through posts I see mom gets $75K from trust, $13K from dads pension plus trust pays her property and school taxes of $15K. So, (exluding taxes), she has $88K, before SS which I would think is maybe another $20K? So she is getting over $100K but wants more than $120K? This is based on the comment about $10,000 per mo. isn't enough. Am I up to speed on this discussion or am I still missing something?


78k from the trust, about 44k from SS & Pension. Yet, it is not enough. That's net, not gross.
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Old 08-17-2016, 09:47 PM   #77
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I don't know why the mom cannot (should not) use her money to support her daughter. Many people on this forum are talking about leaving money to charity, I would certainly make sure that my sons are taken good care of before consider any charity.
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Old 08-17-2016, 09:54 PM   #78
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For one, it is not the Mom's money... the Mom is the beneficiary of the trust. That's the thing about trusts... once the money goes in it can only go out consistent with the provisions of the trust and the trustee is there to ensure that happens.

For all we know the OP's Dad may have foreseen that the OP's youngest sister would be a mooch and manipulate her Mom and that is why he set up the trust... so a cooler head.. the OP, would make the decisions.

But you are correct, once the money becomes Mom's (after it is distributed to her from the trust in accordance with the provisions of the trust) then it is hers to do with as she pleases... that is not in dispute and the OP respects that.
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Old 08-18-2016, 08:01 AM   #79
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$2.5M if she lives to 100 and total return is 0% would last at a payout rate of $95K per year. So $95K minus $15K in taxes yields a payout of $80K per year so I agree your $78K in today's low interest rate environment is close. Might possibly look into these to generate some relatively guaranteed returns: https://www.fidelity.com/insights/in...irement-income
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