My trust fund account?...

Question

My grandmother is about to die. (sadly) Maybe in a year or so. And when she goes I will be getting the money from one of the life insurance policies that she had. The other will go towards funeral expenses. Is there any way that I can take the money that I will get from the policy that she left for me and put it in a trust fund for myself?

But the thing is I want to put it in a trust fund and have it set up so that I can not spend it all at once. I want to put the money in a trust fund. And have the trust fund pay me a certain amount of money out of it monthly. Until it is all used up? Is this possible. If I cannot do this with a trust fund, then what kind of account should I get. A CD or bank deposit account?...PLEASE HELP!

Thanks!

P.S. I am also thinking of doing some investing with stocks and bonds? Do you have any suggestions?

Answer 1

Yes, you could definitely set up your money in a trust fund for yourself that pays you a regular rate of return. Any large bank will do this for you. You can expect to pay them management fees. You should decide ahead of time whether you want interest only or if you want a dollar amount of return which is deducted from principle so that eventually all your money is used up.

Perhaps you are afraid you will spend the money too fast if you have access to it. But if that is NOT your fear, you can set up an account with Vanguard, one of the largest fund management companies, and choose your investment and have them send you a regular check for a specified amount. In fact many mutual fund management companies will do this. You could designate what you want your money invested in, everything from a stock mutual fund to a bond fund to a money market fund. You would have a lot of choices.

I'm not sure if you can set up something with Vanguard so that you CANNOT break the agreement, such as you could with the trust through a bank that I mentioned above.

If you are young and the money is substantial, I suggest you not sock it away indefinitely but put a time stamp on it--ten years, say. As an older person you may change your attitude towards locking away your funds.