Trust Fund

[NickZ]

What is the name of your state? New York ...


I am to inherit a trust that was set up for me to have access to it a certain age (35 yrs old) by my grandfther. It was a trust that was set up for college education use. I went to college on a full scolarship so the money has gone untouched. Any part of it that was not used becomes eligible when I turn 35. I am still about 5 years away from inheriting it according to how the trust was set up. I am in a situation now where I really, really could use a small portion of the money in it. My question is ... is there anyway around this to access a portion of it or borrow from it and pay it back. What rights do I have or does it soley depend on the trustee ???

THANKS for any advice !!!

 

[Dandy Don]

For what reason do you want the money now?
How much money do you need now?
How much money will you be receiving at the age of 35?

Are you working now? If so, then it would be better for you to get a loan from a bank or a credit union.

It will be virtually impossible for you to get access to your trust money now, since the trust must follow strict legal guidelines as to when it can disperse monies to beneficiaries. However, if it is for a good reason, and depending on how much it is, the trustee might be financially well off enough to be able to loan you the money out of his or her personal funds. If the reason is good enough, the trustee may sympathize with your need and try to help you. Or, there may be special instructions in the language of the trust that allow you to borrow under certain circumstances.

Have you ever actually seen a copy of the trust?

 

[NickZ]

The situation is like this ...

I have a good job, but poor credit due to mistakes made in earlier years that I trying to still fix so no credit/loan available from bank. I asked my father for a loan for a business venture that he was very against. He refused the loan and told me the venture was bad and I was stupid if I invested in it. Stupidly, I felt it could work, got hooked up with basically a "loanshark" and borrowed the money from him, thinking that I'd make enough money to absorb the unreal interest and pay back the loan. Long story short - the venture failed, no profits were made and loan was still outstanding with unreal interest being added on month by month basis ... I make decent money, but with all my expenses (rent, food, car payment etc.) I was really only able to pay off interest and not cut into principle. I borrowed 10K about a year ago and still owe about 12K. I assured the guy that the loan would be paid off in under a year and now, because of my assurance, I have been told that if it's not paid in full by year end (5/17/03) the loan will increase by 50% of what is still outstanding (to 18K) and the real problems will start ..... my dad wants nothing to do with it because he advised against it and predicted exactly what has happened.

Sooooooo, the trust has about 125K in it and I'm looking for about 15K. Another hitch is that the trustee is a long time family friend of my family so he will be in a tough position too. I'd be willing to borrow the 15K from the trust and make monthly payments back to it and have it all returned before I turn 35 (I'm mean I'm really paying myself back?). I'm at a loss here and this trust is really the only asset I have to make this payment on the 5/17/03 to pay off this "loan". I guess I'll need to get a copy of the trust and approach the Trustee with my "situation" ... I don't really know him, but he is close with my parents and was tight with my grandfather. He is coming to my wedding this summer and I really want to tell him that if he can't help me out here there ain't gonna be any wedding !!!

Any help/advice on an approach or suggestions are appreciated ...

Thanks !

 

[Dandy Don]

You can ask for a copy of the trust, but New York law doesn't say that the trustee has to give you a copy, so it is basically up to him to decide if he wants to let you see it.

I think that if you sit down with him for a nice talk and honestly explain the predicament you are in, I think he will sympathize with you and go ahead and make you the loan from the trust account. You also need to find out from him the details about where the money is being held and who the secondary/replacement trustee is (just in case something happens to him, such as his death, you would want to know how it would affect you).

 

[NickZ]

Don,

Thanks for the advice !