Can I touch this money before she goes into the Great Beyond?

March 18, 2015 7:16 AM

From what I know, the trust says no, but do I have any recourse if I want to use the money for an important life event? How about an interest free loan? I have no idea who to even ask. A few snowflakes after the jump...

Before my dad died he created a trust for his second wife that will go to me and my brother when she passes away. Until that time she is living off of it. We were only named as benefactors of the trust upon her passing. I am poor. I was just accepted into a master's program that will cost me an arm and a leg. I am getting some loans, scholarships and a relative on my mom's side is chipping in. I would like to ask the trust fund for the same amount as this relative is chipping in.

Who I would talk to to find out if this is possible? Are there ever provisions that sometimes allow for this (health, education needs)? I am financially in the dark about the trust--this is my fault. It's handled by a huge firm that sends me statements every year that I file away without opening. If the answer is a flat out no, could I negotiate with them an interest free loan or am I kidding myself?

Caveat: my stepmother is the ballistic type who lawyers up at the drop of a hat. She wont be happy that I'm asking for money. Financially she is more than fine. After my dad passed away she married a wealthy man who left her even better off when he died.

Side question: My father left her this trust fund assuming she would need it. She clearly doesn't anymore, thanks to husband #2. I doubt this is something I would take to court. I don't have the time or money and she's got both in spades. But I'm just wondering is that even an option?

Thanks for any advice you can offer me. And, it goes without saying, you are not my lawyer.

posted by anonymous to Law & Government (12 answers total)

Until that time she is living off of it.

You would be requesting a piece of the principal. It sounds like she is living off the interest from the principal or possibly has access to the principal itself. Either way, your request would reduce her dividends. Since putting her lifetime welfare ahead of your lifetime welfare seems to be the purpose of this trust, I would guess there is no way this will happen.

Are there ever provisions that sometimes allow for this (health, education needs)?

It depends on the trust itself. Ergo:

I am financially in the dark about the trust--this is my fault. It's handled by a huge firm that sends me statements every year

Open one. Write or email the account manager and ask for a copy of the trust. Then sit down and read it.

If the answer is a flat out no, could I negotiate with them an interest free loan or am I kidding myself?

Again, read the trust document, but assume the answer is no.
posted by DarlingBri at 7:23 AM on March 18, 2015 [5 favorites]

You can contact the lawyer/firm that prepared the trust, and ask as a secondary beneficiary for an explanation of the terms of the trust. I doubt there is a way for you to access the money, but a lawyer would need to look at how the trust is written to answer that for sure. IANAL, but I don't think there's any way that your needs or her circumstances are a factor that would be taken into account unless it was spelled out that way in the trust--it'll all be about how the trust documents were written.
posted by msbubbaclees at 7:24 AM on March 18, 2015

The answer is quite possibly no, but to know that you need:

1) A copy of the trust
2) A lawyer to explain it to you
3) To talk to the firm handling the trust

Without the trust document, no one here can tell you anything.

My wife and I have accessed some money that's in trust for her and her brother (but they are present beneficiaries, so things are different) and we did that by petitioning the trust committee to provide funds with a letter explaining what it's for and recent expense sheet to explain how we don't have the money otherwise. It seems like your trust may be set up differently, but you'd need to read it, then take it to a lawyer to be sure.
posted by Bulgaroktonos at 7:28 AM on March 18, 2015

Trusts are super tight legal encumbrances for money. I assume you are in the US. My knowledge of trust stuff is in the US. There is a person or firm in charge of the trust and that person can answer your questions and likely give you a copy of the trust documents (which will almost certainly be written in legalese but should make some basic amount of sense to you). There is a good chance that this money is locked up but there is no harm in asking though it sounds like you should steer clear of talking to your stepmom about this.

And to be clear: your poverty, her lack of poverty and money you are getting from other relatives has nothing to do with the legitimacy of your claim to any of this money. It is, at this time, either legally allowable or not legally allowable and you'll need to determine that and move forward from there. I know it's frustrating as hell, but this is part of how trusts are designed to be set up and used. It's not like there's just a bank account out there.
posted by jessamyn at 7:31 AM on March 18, 2015 [4 favorites]

3) To talk to the firm handling the trust

Yes, and who is the trustee? Definitely talk to them and to a lawyer. Ask if there is some way you can borrow against the trust. Like everyone else, I am guessing no, but if there is a huge principal your stepmother absolutely cannot touch-- and she is old-- you might be able to do planning based on that expectation.

I would say also, discuss with your brother. In the future, the two of you will be sharing the trust and you don't want him getting mail from the trustee saying that you are trying to access the trust and wondering what that is about.
(Or some similar scenario.)
posted by BibiRose at 7:41 AM on March 18, 2015 [1 favorite]

I'm surprised that she still has access to the trust after remarriage. Check into that. Your father surely didn't want some future husband of hers to spend your family's money.
posted by mareli at 7:42 AM on March 18, 2015 [3 favorites]

Yes, absolutely get a copy of the trust and have it explained to you. My friend was also a secondary beneficiary of a trust that his grandparents set up, and his family didn't think much of it because the trust had been set up so long ago. His parents were the primary beneficiaries and were similarly not using the money since they are fairly well off and comfortable. My friend is a lawyer and so at some point he became curious and got a copy of the trust; they discovered that the trust actually had a term in it that the principal could be used to pay for any of his educational expenses. He gave his law school student loan statements to the trustee and they immediately paid them all off. It is DEFINITELY worth it for you to explore the terms of the trust more carefully.
posted by gatorae at 7:52 AM on March 18, 2015 [7 favorites]

Caveat: my stepmother is the ballistic type who lawyers up at the drop of a hat. She wont be happy that I'm asking for money... I doubt this is something I would take to court...

Assuming you do potentially have access to the money (which as others have said requires reading the trust and discussing it with the trustee and/or a lawyer to find out) it sounds like she wouldn't give any of it up without a fight.

I'm surprised that she still has access to the trust after remarriage. Check into that. Your father surely didn't want some future husband of hers to spend your family's money.

I had similar thoughts, but once again, a careful reading of the trust and expert advice are needed to know this one way or the other. It sounds like it might be worth the effort, though. At least looking at the trust yourself.
posted by TedW at 8:39 AM on March 18, 2015

I know nothing about trusts (except that my sibs andid I were legally screwed out of ours thanks to the relative left as trustee-not anticipated by my parents, such is life)
Perhaps someone here would know about this possibility.

How old is this woman-close to her natural lifetime? She is quite a bit older then your funds could be available within finishing your degree.
Do you have a clean credit record? A good GPA? Can you do work-study at your school? You must be employable because of your undergrad degree? At least part time?
Could you possibly use these things to look more appealing to a bank or CU loan officer?

Why can't you get any federal assistance along with what you have?
posted by BlueHorse at 10:07 AM on March 18, 2015

Talk to the trustee. Or ask mom.

Odds are you can't if it's a type of trust we call a "qualified terminable interest property" trust (QTIP).

Depending on what state you're in, though, you may have a right to get the trust agreement, and that will tell you for sure. So find out who the trustee is and ask 'em for the document.
posted by jpe at 11:19 AM on March 18, 2015

As someone else said, start w/ the bank. You're getting statements as a remainder beneficiary, so there are decent odds you have a right to the document. I'd call the advisor named on the statement and ask for a copy of the trust. If they can't give it to you (and if they're trustee they may well not), they'll tell you how to get it or who to ask.
posted by jpe at 11:23 AM on March 18, 2015

For a trust to get the protection of the marital deduction, the grantor's wife has to be the sole beneficiary. So it is very unlikely that there would be any provision for distribution to you based on any standard such as education.

I would ignore the trust and use other available resources.
posted by yclipse at 1:54 PM on March 18, 2015