spendthrift trust

[markwaterman]

What is the name of your state? Florida

My father set up a trust in Michigan, the trustee has indicated he wants to close the trust and wants to give a portion of the funds, $35,000, to my 21 year old daughter but I feel it would be best if she received the money at a later age when she's more responsible. My daughter and I live in Florida and I see Florida does not allow spendthrift trusts, can a spendthrift trust be set up in MI for her to benefit from it at a later age even though she's in FL? FYI, the trustee is in his late eighties and I'd like my daughter to receive the funds in maybe 15 years.

Thanks - Mark

 

[Zigner]

What is the name of your state? Florida

My father set up a trust in Michigan, the trustee has indicated he wants to close the trust and wants to give a portion of the funds, $35,000, to my 21 year old daughter but I feel it would be best if she received the money at a later age when she's more responsible. My daughter and I live in Florida and I see Florida does not allow spendthrift trusts, can a spendthrift trust be set up in MI for her to benefit from it at a later age even though she's in FL? FYI, the trustee is in his late eighties and I'd like my daughter to receive the funds in maybe 15 years.

Thanks - Mark

Frankly, this is between the trustee and your adult daughter.

 

[LdiJ]

What is the name of your state? Florida

My father set up a trust in Michigan, the trustee has indicated he wants to close the trust and wants to give a portion of the funds, $35,000, to my 21 year old daughter but I feel it would be best if she received the money at a later age when she's more responsible. My daughter and I live in Florida and I see Florida does not allow spendthrift trusts, can a spendthrift trust be set up in MI for her to benefit from it at a later age even though she's in FL? FYI, the trustee is in his late eighties and I'd like my daughter to receive the funds in maybe 15 years.

Thanks - Mark

Is your daughter the only beneficiary of the trust? If he no longer wishes to manage the trust a new trustee could be appointed. It also should be possible to distribute to other beneficiaries while having your daughter's money remain in the trust.

 

[Zigner]

Is your daughter the only beneficiary of the trust? If he no longer wishes to manage the trust a new trustee could be appointed. It also should be possible to distribute to other beneficiaries while having your daughter's money remain in the trust.

I'm sure that the trustee has his reasons and has considered his options. The OP is really not a part of this at all.

 

[doucar]

I am not sure you understand what a spendthrift trust is. It is not a trust to delay receiving benefits it is a trust that protects the capital from a beneficiaries creditors.

 

[Zigner]

I am not sure you understand what a spendthrift trust is. It is not a trust to delay receiving benefits it is a trust that protects the capital from a beneficiaries creditors.

It also protects the principal from a beneficiary who may squander it. That's what the OP hopes to do (yes, markwaterman, I understand what you hope to do).

 

[eerelations]

...a new trustee could be appointed. It also should be possible to distribute to other beneficiaries while having your daughter's money remain in the trust.

OP doesn't have the authority to just up and make this happen.

 

[adjusterjack]

My father set up a trust in Michigan, the trustee has indicated he wants to close the trust and wants to give a portion of the funds, $35,000, to my 21 year old daughter

If the terms of the trust allow the trustee to do that, then you have no say in the matter.

Though it occurs to me to ask: Why is the trustee "indicating" anything to you?

 

[LdiJ]

OP doesn't have the authority to just up and make this happen.

No, but the current trustee, if his reason for dissolving the trust is because he doesn't feel capable of managing it any more has the authority to make it happen. An attorney might also have to be involved, but their are procedures for changing a trustee. They could vary from state to state but every state does have a procedure for that.

 

[eerelations]

No, but the current trustee, if his reason for dissolving the trust is because he doesn't feel capable of managing it any more has the authority to make it happen. An attorney might also have to be involved, but their are procedures for changing a trustee. They could vary from state to state but every state does have a procedure for that.

OP isn't asking whether it's possible to do any of this. He just wants to know what he can do to stop the trustee from giving his (OP's) daughter any money. None of the activities you've listed are things the OP can do.

 

[LdiJ]

OP isn't asking whether it's possible to do any of this. He just wants to know what he can do to stop the trustee from giving his (OP's) daughter any money. None of the activities you've listed are things the OP can do.

Of course the OP can't do those things themselves. However, the OP certainly can have a discussion with the trustee.

 

[zddoodah]

To echo what I told you in response to this identical post at another site:

1. What the trustee "wants" is not particularly relevant. The language of the trust instrument dictates what the trustee may or may not do.
2. Your feelings are even less relevant than what the trustee wants.
3. Your assertion that "Florida does not allow spendthrift trusts" appears to be in error.
4. What you are indicating you would like to happen certainly COULD happen, but it's entirely dependent on the terms of the trust and/or the trustee's discretion.
5. If the trustee has discretion about what becomes of the money, you are free to try and persuade him to do what you think should be done.

 

[ALawyer]

Others have commented on the feasibility and legality of what the father wants, which is unlikely what the daughter wants. I suggest that if all else fails the father consider trying to apply a version of the Marshmallow Test. I might also comment that asking a 20 year old to wait 15 more years before getting any money seems a bit excessive.

Assuming that the 20 year old daughter could receive $35k outright now, which the father fears (probably correctly) that she'll blow, if she's in fact entitled to get the money now, he could create incentives for her to defer receipt of the funds by having them placed in a new trust that is locked up for say, at least 5 years. All he would have to do is add his own $35k to the trust and have it provide that if she takes any money out, without his consent, before 5 years elapses all of his $35k (plus interest or investment income on his money) is returned to him, but each year after 5 years passes, then she can withdraw 10% of the money originally placed in the trust and 10% of the money (plus interest) he placed in the trust vests in her, so essentially she would get an additional $3,500 a year (plus the related interest/investment income) by waiting.

 

[LdiJ]

Others have commented on the feasibility and legality of what the father wants, which is unlikely what the daughter wants. I suggest that if all else fails the father consider trying to apply a version of the Marshmallow Test. I might also comment that asking a 20 year old to wait 15 more years before getting any money seems a bit excessive.

Assuming that the 20 year old daughter could receive $35k outright now, which the father fears (probably correctly) that she'll blow, if she's in fact entitled to get the money now, he could create incentives for her to defer receipt of the funds by having them placed in a new trust that is locked up for say, at least 5 years. All he would have to do is add his own $35k to the trust and have it provide that if she takes any money out, without his consent, before 5 years elapses all of his $35k (plus interest or investment income on his money) is returned to him, but each year after 5 years passes, then she can withdraw 10% of the money originally placed in the trust and 10% of the money (plus interest) he placed in the trust vests in her, so essentially she would get an additional $3,500 a year (plus the related interest/investment income) by waiting.

That is a really excellent idea in general, but it gives the daughter no immediate gratification. I would build something into the idea that gives her a bit of money to play with over those 5 years...or at least an upfront amount now. It doesn't have to be huge, but maybe enough to put a down payment on a sensible car if she needs one or to cover something else near and dear to her heart.

 

[zddoodah]

Others have commented. . . .

That is a really excellent idea in general. . . .

While the OP has not returned to this thread for further comment, he/she did return to the other site and made some further comments, and it's worth remembering that, except to the extent that the trustee of this trust is persuaded by the OP, the OP has no say whatsoever in this matter.