what is a trust fund? what can money be used for?

amother

Thu, Sep 12 2013, 10:30 pm

I have an elderly neighbor who is asking for my help. She has three grown children and when she ended up in the hospital recently, they hired an accountant to set up a trust fund with her money in their names. They convinced her that with the money in the trust and out of her name, she would be able to apply for government benefits because the money was legally not hers any longer but theirs. Does this make sense? I don't know where to turn for information, so I figured I'd ask here on Imamother, and you can all direct me to the right sources to hopefully help me/her out. Thanks so much!

wife2

Thu, Sep 12 2013, 11:12 pm

It could be that she can't access the money anymore. There is revokable and irrevocable trust funds. If it is revokable, she can still get her money. If it is set up as irrevocable trust, then if she needs the money she won't be able to get it. It can also be a bad trust fund and the investments can have high fees and may not be good.

It is true that she may be eligible for more benefits as the money is not hers anymore - but if she needs the money she may not be able to get it back. She should make sure to get advice from someone who is not trying to sell her stuff. Usually if they are trying to convince her, it means they have an agenda where they are getting a lot of commissions or fees because of her and she is not gaining. She should speak to someone objective.

If you need more specific help and have detailed questions, please feel free to pm me and you can discuss it further. I can probably give more information if you provide more details.

amother

Fri, Sep 13 2013, 12:25 am

It sounds irrevocable to me. Sounds like she can no longer have access to her money. But does that mean the children can use her money for their own needs, yet if she needs something she has to come to them and they can decide to decline her request for help? This is really sad Sad

I feel so sorry for her!

amother

Fri, Sep 13 2013, 12:30 am

Wife 2, are you an accountant or financial advisor? If your offer still stands, I would definitely like to pm you after yom kippur iy"H. In the meantime, I know you are busy before the fast, but can you just explain if the children have free run on her money and can use it for whatever they need/want, while she can't get a few dollars out of the trust for her daily needs and wants?????

Growing

Fri, Sep 13 2013, 12:32 am

You probably need to know more detailed information about the trust but I know that there is someone at Revival Home Health care who help the elderly and or their children navigate this 'parsha'. Creating a trust fund is a common practice - usually it is done for the benefit of the senior citizen involved.

wife2

Fri, Sep 13 2013, 1:23 am

my husband is a financial advisor so he helps me answer these kind of questions. basically, every type of financial situation is a whole big thing. it is hard to get a complete picture without knowing all the details. but it seems that she won't be able to get her money. you can definitely pm me and I can try to help. there are so many complicated details with trust funds - she needs to be careful with what she is doing before she gets stuck in a legal situation where she does not want to be.

amother

Fri, Sep 13 2013, 3:32 pm

OK, so my most specific question for right now, or after yom kippur at least, is how this woman can get a few dollars out of her trust fund. Can her children write her a check? Or can they write themselves a check, cash it and give her the cash. She is totally frustrated that she worked her whole life to accumulate a substantial savings, and now in her mid-eighties she has to come to her children for every thing she needs or wants and they decide for her if she really needs it... how pitiful!
Also, one more question, if I may... can this account be used to pay her rent and/or utilities. Or what can it legally be used for? Do the children have access to her trust money for all their needs and wants, or does every penny spent have to be accounted for? Thanks so much for your help and advice.

ROFL

Fri, Sep 13 2013, 3:42 pm

If this is a specific trust ti get her Medicaid eligible Generally the money has to be spent on her. They write the checks. Te money can be spent on anything that Medicaid won't cover. So rent , clothing food trips vacation etc is ok but paying for a doctor is not.
If the trust Is written correctly they are not supposed to spend the money till after she is gone.
Her kids should give her either cash or an ATM card or checking account on their name that she uses to take out money. That way she doesn't need to ask them
You can PM me after Yom Kippur