Jonathan; The corporate trustees I've interviewed charge 1% of AUM, which is twice the fees charged by the trustee services of Vanguard or Schwab, 0.5% (noted above). Over 45+ years this compounds to a significant amount of "lost" money. I don't see their advantages, except perhaps more personalized contact with my daughter. Also, my Trust instructs payments for HEMS (Health, Education, Maintainence, and Support), which could substantially increase payments in some years.
I have a tangential question related to "bequest" Roth accounts. I assume you are giving it as a lump sum to your kids because you feel they are wise with money and you are their father/teacher. However, my 24 yr old daughter (I am 74) has personal struggles, will never be a high wage earner, and is not a responsible financial planner. I now fund her Roth account each year. In terms of bequest, to be funded by my Roth, I have set up a Revocable Trust that will automatically pay her 1% of assets per year, with optional additional payouts authorized by the (now 60 yr. old) Co-Trustee, whom my daughter will obviously out live. Who then manages the investments and acts as the Sole Trustee? I've talked with Vanguard and Schwab, who each charge about 0.5% of assets (and have different investing approaches, and loyalties). Any other suggestions? And what stock/bond split do you think would be appropriate to grow the invesment but also allow for her yearly, possibly irregular, withdrawals? I hope this is not too off topic.
Comments
Jonathan; The corporate trustees I've interviewed charge 1% of AUM, which is twice the fees charged by the trustee services of Vanguard or Schwab, 0.5% (noted above). Over 45+ years this compounds to a significant amount of "lost" money. I don't see their advantages, except perhaps more personalized contact with my daughter. Also, my Trust instructs payments for HEMS (Health, Education, Maintainence, and Support), which could substantially increase payments in some years.
Post: Happily Ever After
Link to comment from December 16, 2023
I have a tangential question related to "bequest" Roth accounts. I assume you are giving it as a lump sum to your kids because you feel they are wise with money and you are their father/teacher. However, my 24 yr old daughter (I am 74) has personal struggles, will never be a high wage earner, and is not a responsible financial planner. I now fund her Roth account each year. In terms of bequest, to be funded by my Roth, I have set up a Revocable Trust that will automatically pay her 1% of assets per year, with optional additional payouts authorized by the (now 60 yr. old) Co-Trustee, whom my daughter will obviously out live. Who then manages the investments and acts as the Sole Trustee? I've talked with Vanguard and Schwab, who each charge about 0.5% of assets (and have different investing approaches, and loyalties). Any other suggestions? And what stock/bond split do you think would be appropriate to grow the invesment but also allow for her yearly, possibly irregular, withdrawals? I hope this is not too off topic.
Post: Happily Ever After
Link to comment from December 16, 2023