Ask MetaFilter questions tagged with trustfund

Reluctant Trustifarian

Anonymous — Wed, 29 Oct 2008 10:32:40 -0800

My parents have offered to *give* me between $100K and $120K to go in on a house with them. I will accept this gift, but I need some help figuring out how to handle the strings that are certainly attached. Long story. (Yes I'd get a lawyer. I just want to know what issues to consider once I consult one.)

Last night my parents called me and told me that they had recently come into an unexpected and large lump sum of cash from a retirement settlement. They've been wanting me to get a house, and I have been wanting a house. I make a pretty paltry salary, however, and so my abilities to buy a house on my own are limited. They'd offered me money for a downpayment in the past, but I decided that it would still be too much of a financial stress. This offer changes things.

They discussed the best way give me this $100-120K for a house with their lawyer, and it seems that they have a trust that is set up to go to me and my sister upon their deaths. Their intent, however, is for me to get some of the money now, rather than in 20-30 years when they die. So the trust would own 2/3 of the house, and I would own 1/3.

There are a few conditions, however.
First, they want a house with at least 3BR and 2 baths, for them to stay in when visiting. They live 800 miles away, so it's not like they'd be dropping in often. Also, I asked them what amount of time they were expecting to spend there, and told them in no way would I want them to be there for weeks at a time. They don't want that, either. I'm OK with this string.

Second, they want veto power over the house I choose. This is to protect what they see as their investment, and their considerations would be neighborhood, condition of the house, age of the house, etc. We probably agree on these things with little concern, so I'm OK with that as well.

Other issues we discussed: I could have a housemate, as long as they could still stay there when visiting. I'd like to get a dog, and they're OK with that, too. I'd be responsible for property taxes, and we have not discussed who'd be responsible for maintenance and repairs. I'd assume that would be me. If I moved, they'd buy me out. The equity from their contribution would eventually go to me anyway, upon their death.

Overall, the preliminary discussion was reasonable. I was able to express my worries about it seeming like a business deal in the family. They understood. I asked if they'd freak if I got a lawyer for me. They were all for it--due diligence, they said.

My immediate concerns:

1) that my mother will nag me to death about house upkeep or any other things she doesn't like that I do. She does this. It's like she can't help it. I'm admittedly not very good at doing things quickly. I'm also very messy.

2) I have several step-siblings that my parents have broken all ties with.None of them did anything extremely horrible, by the way. It's been at least 8 years since my parents last had contact with these siblings. That means my full sibling and I are the only ones who are getting any of my parents money, and we're to split it 50/50. Deep in my heart, I wonder if I'd ever get the boot, too. I don't think so, but I want to protect myself just in case. It's a hot mess.

3) My mother has a history of manipulation through money. I went to an expensive private university far from home for undergrad, which they bankrolled entirely. After my first year, my mother tried to get me to move back to the area by offering to buy me a brand new luxury car if I'd transfer to the highly ranked state school nearish to them. I set my boundaries and gave a firm "No" to that suggestion. In addition, I went to grad school in a field that they did not like, and they didn't contribute. However, they repeatedly offered to pay for me to go to medical school, which I was never interested in. Final example: I have some issues with depression, and my mom is on my case at all times to exercise more. On my suggestion, she bought me a gym membership recently so that I'd do so. Money=love.

4) My sister (the only other still in good graces), has always called me the "favored child." This offer doesn't help that. My parents are aware of this problem, so the offer is a secret for now while they work out how to make this equitable. I don't want her to resent me. She lives a few blocks from them and has children. She benefits from that in many ways that aren't as tangible as a large sum of cash. Unlimited access to a beach house. Expensive dinners. Free babysitting. Spoiled grandchildren. I don't begrudge her those things at all, but it does rankle occasionally that she thinks I get everything and she gets nothing.

5. My mom is concerned that she'll die first, that my stepfather will get remarried (which she'd want) and that my sister and I will end up penniless (other than what we have from ourselves). I know that's in part her motivation to give me money now. My stepfather is 100% with her on this gift, however, as we had a conference call about it last night.

In sum, this is what advice I'm seeking:

What kinds of things should I include in a legal agreement? Is it appropriate to put limits on how often they visit, who's responsible for what, how to resolve conflicts, and such? What else should I consider that I haven't thought of? Also, what can I do to allay my fears of them rescinding in case I fall out of favor like my other siblings have? To be clear, they're saying this is a *gift* not a loan. Do I broach my mom's concern that stepfather will change his will if she dies first?

How do I navigate the interpersonal issues? I'm pretty good at setting boundaries, but I worry that such a big gift will make them think they have influence over the choices I make in life that are unrelated to the house. Or that they'd use the house as a way to try to control me.

I know that's a lot of information. I hope it's enough. If anyone wants clarification, you can contact me at reluctant.trustifarian@gmail.com

Also, I know that I'm extremely privileged, and I hope I am sufficiently humble about it. This level of privilege embarrasses me, actually, but that's another question for later, maybe.

What would be the best way for me to pay for my degree?

mindless progress — Mon, 16 Jul 2007 19:05:24 -0800

I've decided that I want to start getting my life together by working on earning a degree in computer science. To do that, I'm going to start attending the local community college full time this fall, in order to cover some basic classes, and then transfer to full university later when I'm a bit more transfer-worthy. Now I need help figuring out how to best manage my money so as not to accrue too much debt in the process. Ideally I'd like to get as much financial aid as possible to cover this, but there are a few issues. Some background:
I'm 24 and want to go back to school. "Back" isn't quite right because the two previous times I've tried community college I've ended up flaking out and getting F's. That wasn't much of a surprise as I pretty much flaked out on high school and got F's then as well. Now that I've gone out and matured myself with some real life, I feel like I'm really ready to take on school again and go all the way.

As it stands I'm currently working full time 9 to 5. I've determined that if I'm really going to pursue this I'll have to devote myself to school full time; I just don't have the ability to manage school and work at the same time. Of course that means that I won't have any sort of real income and would need to get financial aid or something else to help cover school at living expenses.

At the moment there are a few problems with getting financial aid for this school year.
1) I decided too late in the year that I want to go back to school as the financial aid barrel is pretty empty and any scholarships I could get wouldn't be applicable until the next school year.
2) At the moment I make too much to qualify for any particular help with school. In order to get only school costs covered I would have had to quit my job about a month ago to show that I had financial need by the time school starts.
3) I recently found out that I have access to $22,000 in a trust fund. This really screws up the EFC (Expected Family Contribution) on the FAFSA and seems like it will prevent me from getting any sort of aid in the future.

My current plan is to take some money out of the trust fund to cover me through to the end of the next semester. After that I'm really at a loss for what to do. I'm not opposed to spending the trust fund money on school, but it seems a bit wasteful to spend it all on living expenses while I'm attending community college. I know a more responsible plan would be to keep working and save up money so I can really cover school, but I just feel like now is the time for me to really focus on moving forward with my life and dedicating myself to school. It really feels like I'm in a position that will let me do this, but I want to feel like I've got more than just the next five months planned.

So would I be better off just spending the trust fund money to get to "real" college and then relying on financial aid/student loans to see me through? Other than that I'm really at a loss for how to manage this.

What does a trust fund baby need to learn to take care of themselves?

the giant pill — Fri, 11 Aug 2006 11:13:25 -0800

A trust fund baby messed up and doesn't have any money and/or access to family that took care of them. So now they are working at an average 20something wage. What common lifeskills do they need to learn to take care of themselves? This person was brought up with everything taken care of for them. All they learned to do was be a passable student at an exclusive school. So I am thinking things like - learn to change a tire, how to wash dishes, laundry, ... etc. They need to learn how to take care of themselves now. I would like to give a friend some resources that would help them to make help with self-reliance. Things just keep coming up that boggle me, and I would like to preempt situations that are going to come up in the future.