The definition of “need” is critically important. Was he averting bankruptcy, or potential homelessness? Or did he “need” a trip to Bali or Sao Paolo? Or somewhere in between? (Rhetorical questions, obviously.)
The only time I ever considered borrowing against future inheritance was in 2001, when my financial situation was about to crater and the rest of my family refused to lend aid. In the end, I had to decide whether it was even worth it for survival (my mind was in a completely foreign state back then) and it was a choice I spent a long time pondering. Then, September 11th happened, and that changed everything. Go figure.
Meanwhile, my youngest half-brother, who’s a bit selfish and crazy, will someday inherit about $2.5M from his mother’s side; but the trust stipulates he won’t inherit a dime until the trustee actually dies. He does receive a “small” monthly stipend at the trustee’s discretion (which is allowed by the trust) which grants him the freedom to party with friends and travel 'round the world and never need to work at an actual job, yet his “sense of entitlement” is FAR beyond what I would’ve ever expected from him. It really does suck to witness that change in him, esp. since I helped raise him from an infant.
Practical concern - consider a $10,000 loan at 10% interest… but I’m not paying it back for 5 years.
Do the math - first year (ignoring monthly compounding) owe $11,000
Year 2 - 12,100
Year 3 - 13,310
Year 4 - 14,741
Year 5 - 16,215
And 10% is a low interest rate for this situation. At 20% (still less than many credit cards) in 5 years $10,000 becomes $24883.
See the pattern here? Borrowing for any length of time costs a lot more than the original amount. That’s the lesson.
My advice - keep trying to pay off your sister, give her a fair rate of return and if you still owe when 5 years have passed, on a debt of $3,000, then recognize you should work on you money management skills.
Averting bankruptcy - but it didn’t matter anyway - the money was not his until it was disbursed therefore could not be used as collateral in a secured loan. In his case it wasn’t a trust - it was a payout from an inheritance that took a few years to work its way through to the heirs.
He declared bankruptcy, got the money, and seven years was bankrupt again.
The trustee’s fees are almost certainly specified in the trust document, and $140 is not an unreasonable fee for an attorney who specializes in estate matters. I agree with the person who suggested asking the trustee for an advance; people aren’t stupid and usually build some flexibility into their trusts.
Sorry, I shouldn’t have spoken like an expert. Maybe it IS reasonable for a trustee to charge that much for a chat, but it’s so far away from my world. It hurts my small-town heart.
I briefly worked for the trust department of a major bank and that is all we did. It was amazing to see how some of those trusts were set up - but the vast majority did have the first payments at about age thirty.
There is a reason for that - they figure by then you might have finished school, perhaps started some kind of family, and then could use the money to buy a house or settle in or pay off college loans.
However, as mention, often they will parcel some out to help now (in certain cases) if deemed necessary - to help with tuition, or if you cannot afford rent or something serious.
I suppose five years seems a long time to wait, but if you can hang in there - it will be worth it.
(Some of the odd things I have seen in these trusts: NO MONEY unless they get a Masters Degree, NO MONEY unless they stay drug/alcohol free, NO MONEY unless they are married…some people are rather specific, even after their death, about who gets what - if at all. I did see one that gave all the kids equal trust funds, but for the problem child - a drug addict - the money was to be given to him per week, and not in a lump sum - and the only exception would be to pay his monthly rent which would be paid directly from the bank to the landlord.)
the reason i started this thread was because i needed to fix my car which had engine issues and did not have the money available. i got a few cheap shots at my grammar (common troll tactics) and a few sour people questioning how responsible i am as an adult (mad cuz you are still living with your parents troll boy?) but over all i found most of the responses very informative and relevant to what i was asking.
this is the internet which is highly informal… not an essay (im a marine biology major/anthropology minor) so if you wanted to grade papers you should have gone to college and gotten a teaching job. the last thing i am thinking about with everything going on right now is if i am pleasing some grammar nazi with my use of grammar and punctuation (after a couple comments i started purposely writing devoid of either). this should be a natural flowing conversation (dont forget to say ‘period’ after you ask your mother for gas money tomorrow) not a formal document so proper sentence structure is irrelevant to me and should be to you as well (unless you are a professor).
basically my need to take out a loan or borrow against my inheritance to fix my car has been solved thanks to my sister being very generous (it was difficult to ask because i do everything on my own) and i have paid back over 1,000 with my RETURN!!! (at least that guy was funny with how he corrected me) so you guys can consider this thread as CLOSED.
thanks again for the people that put forth something i could use and or learn. for the others it is time to look for another bridge.
not sure about the IMHO move. it is a two part question. hopefully you would answer the second part of the question based on the FACTS that you stated for the first part of the question…not simply going to the ‘should i do it’ part because you cannot put forth anything of use for the ‘inheritance loans. how do they work’ part.
two part questions usually require two answers with the second supporting the first IMHO
It’s against the rules here to call other people names (including “troll”). You can do this all you want in the BBQ Pit, but not in any other forum, so don’t do it again.
