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Old 02-17-2014, 02:36 PM
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Inheritance Loans. How do they work? should I do it?

Recently I came into some inheritance money via death of a relative. The catch is the way the fund is set up I cannot access the money until i am 30 years of age (now 25 years old) so i will not be able to see the money for another five years.

I have looked for information online but the information provided is pretty murky and never really says how the process works and or how much interest will be added to the loan.

so basically.. how does all this work? will i get a loan on money i cannot access for 5 years? what is the interest cost on such a loan.

-thanks in advance

Last edited by Jimmyhat4; 02-17-2014 at 02:37 PM.
Old 02-17-2014, 02:45 PM
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Originally Posted by Jimmyhat4 View Post
Recently I came into some inheritance money via death of a relative. The catch is the way the fund is set up I cannot access the money until i am 30 years of age (now 25 years old) so i will not be able to see the money for another five years.

I have looked for information online but the information provided is pretty murky and never really says how the process works and or how much interest will be added to the loan.

so basically.. how does all this work? will i get a loan on money i cannot access for 5 years? what is the interest cost on such a loan.

-thanks in advance
I'd say that's a big red flag. Wait the five years, then you'll have it all without losing some to interest.
Old 02-17-2014, 02:50 PM
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Probably works the same as those cash for annuity places. If you're due say 100K in 5 years you sign it over to them for maybe 75K now.
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Old 02-17-2014, 02:53 PM
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I'd say that's a big red flag. Wait the five years, then you'll have it all without losing some to interest.
thanks for the reply but i am looking for information about the process of receiving cash advances or loans on an inheritance fund.
Old 02-17-2014, 02:57 PM
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Probably works the same as those cash for annuity places. If you're due say 100K in 5 years you sign it over to them for maybe 75K now.
well i inherited 110k. at age 30 i have access to 24k. at age 40 i have access to the remainder which both are sitting in savings and investments funds until i decide what i want to do with them.

i plan on keeping them where they are for the future. but i have car issues i need to have fixed so i can have a dependable car to get to and from work.

i am not looking to hand sign over my entire fund i just want a chunk that i can pay off later.

Last edited by Jimmyhat4; 02-17-2014 at 02:57 PM.
Old 02-17-2014, 03:00 PM
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Originally Posted by Jimmyhat4 View Post
thanks for the reply but i am looking for information about the process of receiving cash advances or loans on an inheritance fund.
Cash advances and loans are different.

Suppose you stand to inherit $50,000. A cash advance is where they give you $35K now and in five years they take the $50,000. A loan is where they give you $50K now and charge you interest up the wazoo. Then in five years you give them the $50K plus interest.

They're hoping you want it now badly enough to accept them grabbing as big a cut as they can get away with. Talk to a financial advisor, because anyone who offers you a cash advance or a loan is hoping you are either desperate or dumb.

Regards,
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Old 02-17-2014, 03:05 PM
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i plan on keeping them where they are for the future. but i have car issues i need to have fixed so i can have a dependable car to get to and from work.
IANAFinancialExpert. Borrow the money, but do not go to anyone who talks about cash advances or settlements. Disclose that you have $24K coming in five years, so you will probably get a better interest rate. Go to your bank or a credit union.

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Old 02-17-2014, 04:16 PM
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Obviously the reason the inheritance is set up this way is because a 25 year old is not considered financially responsible versus a 40 year old, and the concern is that you would blow all the money right away. While I understand that your only immediate need for the cash is that you need it to fix your car, the easy solution is to take a loan for the minimum amount you need and use that future inheritance as collateral. In other words, don't take the loan against the 24K, but rather the $2,000 you need for the repairs (or whatever it is). And try to pay it back before you turn 30.

One obvious place to go for that loan is the institution that is holding the money for you as they are the ones that can most easily validate that the money is there. I would then shop around and call other banks and credit unions you are eligible to join and see if they can give a lower interest rate or more favorable payment terms (whichever is more important to you). I suspect that money was broken up that way as it's designed to be for a downpayment on a house when you are 30, and to help pay for your kid's college or other life issues when you are 40 (or possibly to pay off the rest of your house at that point).
Old 02-17-2014, 04:37 PM
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... The catch is the way the fund is set up I cannot access the money ... for another five years. ...
What does the trust document say? If the relative didn't want you to have the money for five years, the trust instrument probably has language that does not allow you to use the trust as collateral.
Old 02-17-2014, 05:00 PM
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thanks for the reply but i am looking for information about the process of receiving cash advances or loans on an inheritance fund.
If you're not interested in anything but the how-to, you're likely to get the best answer from whoever makes such loans.
Old 02-17-2014, 09:53 PM
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As a less-than-desirable member of the credit world, allow me to say:
Sell your first born before going to people who do "advances".
Fark had an entry re a $400 "payday loan" which was paid off, IIRC after x years and 8 THOUSAND dollars.
If you think a 20% APR credit card is expensive, you do not want to read the fine print on "advances".

Note: Yes, I know some tax preparers will loan on anticipated refunds - those are not what we are talking about.

The rules for such loans are generally regulated at the state level - some states allow only so much blood, others places allow them to suck you dry.

Start with the folks holding the trust - as mentioned, it is highly likely that the terms will not allow you to even use it as collateral. For enforcement, the testator (person whose will created the trust) may have specified that your attempt to borrow on it disqualifies you from ever getting a cent.
If you CAN use it as collateral, deal only with real banks not "Payday Loan" places.
Old 02-17-2014, 10:55 PM
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Originally Posted by Jimmyhat4 View Post
Recently I came into some inheritance money via death of a relative. The catch is the way the fund is set up I cannot access the money until i am 30 years of age (now 25 years old) so i will not be able to see the money for another five years.

I have looked for information online but the information provided is pretty murky and never really says how the process works and or how much interest will be added to the loan.

so basically.. how does all this work? will i get a loan on money i cannot access for 5 years? what is the interest cost on such a loan.
With all that money coming to you, you should be able to afford to use capital letters, like th grown-ups do.
Old 02-18-2014, 12:31 PM
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With all that money coming to you, you should be able to afford to use capital letters, like th grown-ups do.
Some have feathers and bite, and some have whiskers and scratch.

Last edited by bob++; 02-18-2014 at 12:31 PM.
Old 02-18-2014, 05:14 PM
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Here is the other thing to consider regarding advances on inheritance/annuities - the longer the company has to wait to collect, the higher the interest/fee. Five years is a pretty long wait for a return on their investment, I would expect they would only offer you between 60% to 75% of the face value.

ETA - As bizerta said, inheritance funds are different than an annuity. According to the will, what happens to the fund if you die? Does it go to your estate or is it redistributed among the remaining survivors? A cash advance or loan against those funds may not even be possible. It almost certainly is not wise.

Last edited by Doctor Jackson; 02-18-2014 at 05:18 PM.
Old 02-18-2014, 07:19 PM
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With all that money coming to you, you should be able to afford to use capital letters, like th grown-ups do.
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[email protected], let's refrain from personal remarks about other posters (especially if you can't manage to spell the word "the" correctly yourself - a nice illustration of Gaudere's Rule.) No warning issued, but there's no need to be insulting.

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Old 02-18-2014, 07:38 PM
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Originally Posted by Jimmyhat4 View Post
well i inherited 110k. at age 30 i have access to 24k. at age 40 i have access to the remainder which both are sitting in savings and investments funds until i decide what i want to do with them.

i plan on keeping them where they are for the future. but i have car issues i need to have fixed so i can have a dependable car to get to and from work.
If you're in work, you really should be able to get a modest loan to keep a functional car on the road without having to mortgage your inheritance. Can you not service a loan of that size out of your earnings?

If you borrow against your expected inheritance on the understanding that you pay back principal plus interest when your inheritance comes through, you will pay five years interest on the whole amount of the principal. That will be much, much more than the interest you would pay if you clear the loan by instalments over, say, two years, which (unless you have a really badly-paying job, or want to pay much more for your car than you need to) should be easily doable.

The fact that you have 24k coming to you in five years time should give the lender some comfort. But you should definitely not be looking to the 24k to repay your car loan; that would be a much, much more expensive deal that you need.
Old 02-18-2014, 08:33 PM
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With all that money coming to you, you should be able to afford to use capital letters, like th grown-ups do.
If you are going to scold people for their grammar, you could spend a minute checking your own.
Old 02-18-2014, 08:35 PM
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If you ever had a Student Loan of the 4 year college variety, you know what deferred interest looks like - that loan for the first year is real expensive by the time it becomes payable.

Can you trade the car for a cheaper (working) one which will last long enough to get you to that first disbursement?
Old 02-18-2014, 10:34 PM
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I am not a lawyer, but I have created a couple of trusts for my family and am a trustee for a few other trusts. But I am just some guy on the internet, so take everything I write with a grain of salt.

If the money is in a trust, the trust might have language permitting you to request some of the funds at the discretion of the trustee. If you have a legitimate need for the funds (say repairing your car so you can get to work or school, or you need the money for your education), you may be able to persuade the trustee to make a payment. The trustee may prefer to pay the funds to the car repair place or school or wherever directly, rather than simply advancing you the funds directly.

You should ask the trustee for a copy of the trust, and for an accounting of the trust at regular intervals. They might not be required to comply, but they may do so anyways. The trust may have language that requires a periodic accounting upon the beneficiary's request (you = beneficiary).

If the trustee is a family member, and if they won't give you a copy of the trust or tell you that you can't have any of the money, try to find out who the lawyer was who set up the trust and find out if you can confirm that what the trustee is saying is correct. Sometimes if the trustee is a family member, they may not understand the trust document correctly or in full, so you might not want to take just their word for what the trust says.

There are places that will give you an advance loan against such funds, but remember, they only do it because the make a large profit doing so, and that profit comes straight out of money that would otherwise go to you.
Old 02-18-2014, 11:39 PM
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Originally Posted by Jimmyhat4 View Post
Recently I came into some inheritance money via death of a relative. The catch is the way the fund is set up I cannot access the money until i am 30 years of age (now 25 years old) so i will not be able to see the money for another five years. [...]

so basically.. how does all this work? will i get a loan on money i cannot access for 5 years?
Here's a silly thought. Why don't you try learning to become responsible with whatever income you have right now, instead of frittering away whatever fortune you have coming to you? The laws protecting your trust fund are there for a reason -- five years may seem like forever now, but trust me, once you grow up you will be glad that you waited.

(And yes, mods, this is entirely germane to the discussion, IMHO.)
Old 02-19-2014, 11:25 AM
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Originally Posted by [email protected] View Post
With all that money coming to you, you should be able to afford to use capital letters, like th grown-ups do.
thanks i will keep that in mind
Old 02-19-2014, 11:33 AM
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Originally Posted by Doctor Jackson View Post
Here is the other thing to consider regarding advances on inheritance/annuities - the longer the company has to wait to collect, the higher the interest/fee. Five years is a pretty long wait for a return on their investment, I would expect they would only offer you between 60% to 75% of the face value.

ETA - As bizerta said, inheritance funds are different than an annuity. According to the will, what happens to the fund if you die? Does it go to your estate or is it redistributed among the remaining survivors? A cash advance or loan against those funds may not even be possible. It almost certainly is not wise.
my share would be split among the remaining survivors if i were to die yes.
Old 02-19-2014, 11:35 AM
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Here's a silly thought. Why don't you try learning to become responsible with whatever income you have right now, instead of frittering away whatever fortune you have coming to you? The laws protecting your trust fund are there for a reason -- five years may seem like forever now, but trust me, once you grow up you will be glad that you waited.

(And yes, mods, this is entirely germane to the discussion, IMHO.)
i do have a job and i live on my own. i just put 3,000$ into engine repairs so i can keep on being responsible. dipping into some of my money to help myself out does not seem like a very irresponsible thing to do at all IMHO. thanks for the advice though
Old 02-19-2014, 11:39 AM
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If you ever had a Student Loan of the 4 year college variety, you know what deferred interest looks like - that loan for the first year is real expensive by the time it becomes payable.

Can you trade the car for a cheaper (working) one which will last long enough to get you to that first disbursement?
i have had fafsa loans for college but with that type of financial aid i only had to pass my classes to not have to pay off the loan. i have never dealt with any other type of student or financial aid/loan
Old 02-19-2014, 11:40 AM
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But it's not your money yet, so "dipping into" it could be pretty irresponsible depending on how much that dipping costs you.

So you put in 3 grand in and you STILL have car issues that need fixing? A monkey with a job can get a car loan and the terms are likely to be a lot less punishing than mortgaging your trust fund. Maybe it's time to just get a new/used car.
Old 02-19-2014, 11:45 AM
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I am not a lawyer, but I have created a couple of trusts for my family and am a trustee for a few other trusts. But I am just some guy on the internet, so take everything I write with a grain of salt.

If the money is in a trust, the trust might have language permitting you to request some of the funds at the discretion of the trustee. If you have a legitimate need for the funds (say repairing your car so you can get to work or school, or you need the money for your education), you may be able to persuade the trustee to make a payment. The trustee may prefer to pay the funds to the car repair place or school or wherever directly, rather than simply advancing you the funds directly.

You should ask the trustee for a copy of the trust, and for an accounting of the trust at regular intervals. They might not be required to comply, but they may do so anyways. The trust may have language that requires a periodic accounting upon the beneficiary's request (you = beneficiary).

If the trustee is a family member, and if they won't give you a copy of the trust or tell you that you can't have any of the money, try to find out who the lawyer was who set up the trust and find out if you can confirm that what the trustee is saying is correct. Sometimes if the trustee is a family member, they may not understand the trust document correctly or in full, so you might not want to take just their word for what the trust says.

There are places that will give you an advance loan against such funds, but remember, they only do it because the make a large profit doing so, and that profit comes straight out of money that would otherwise go to you.
thanks that is a very helpful reply. i am reluctant to talk to the trustee often because she charges 140$ and hour to talk about anything regarding the trust fund and funny thing being on hold or her doing research or pulling files or information counts towards that charge. and sorry apparently my lack of care for grammar and punctuation on an internet forum pisses people off lol
Old 02-19-2014, 11:48 AM
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Do not get a loan or an advance. That's like putting it on your credit card. The interest will end up being a huge amount.

You've already paid the $3000? How did you pay for that? And $3000 sounds like a lot to put into car repairs if you're tight on cash.
Old 02-19-2014, 11:49 AM
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As a less-than-desirable member of the credit world, allow me to say:
Sell your first born before going to people who do "advances".
Fark had an entry re a $400 "payday loan" which was paid off, IIRC after x years and 8 THOUSAND dollars.
If you think a 20% APR credit card is expensive, you do not want to read the fine print on "advances".

Note: Yes, I know some tax preparers will loan on anticipated refunds - those are not what we are talking about.

The rules for such loans are generally regulated at the state level - some states allow only so much blood, others places allow them to suck you dry.

Start with the folks holding the trust - as mentioned, it is highly likely that the terms will not allow you to even use it as collateral. For enforcement, the testator (person whose will created the trust) may have specified that your attempt to borrow on it disqualifies you from ever getting a cent.
If you CAN use it as collateral, deal only with real banks not "Payday Loan" places.
thanks man a very helpful reply. this is my first post and it is nice to educate myself in this way so if i do decide to talk to the bank or trustee about this i will have some prior knowledge. i was beginning to think this site was for people to just belittle your questions and grammar. so thanks!
Old 02-19-2014, 11:52 AM
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Do not get a loan or an advance. That's like putting it on your credit card. The interest will end up being a huge amount.

You've already paid the $3000? How did you pay for that? And $3000 sounds like a lot to put into car repairs if you're tight on cash.
yea i paid to have the cylinder and gasket fixed as well as the motor mount. my sister is already over 30 so she has access to her 24,000. she basically gave me the money that i needed for the repair when she found out that i was having trouble. we live in different states so she just wired me the money through my checking account. i promised to pay her back over time. basically i made a deal with her similar to what i would ask the bank or loan shark to do. so even though my immediate car troubles are no longer an issue i think it is still valuable to know

i basically just gave her my tax return since it came in the mail today. although it did not cover what i borrowed it was a good chunk of it to pay her back fast

Last edited by Jimmyhat4; 02-19-2014 at 11:56 AM.
Old 02-19-2014, 12:42 PM
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i basically just gave her my tax return since it came in the mail today. although it did not cover what i borrowed it was a good chunk of it to pay her back fast
To add to the grammar pile on.

You gave her your REFUND. The RETURN is what you filed to get said REFUND.

Old 02-19-2014, 02:13 PM
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i am reluctant to talk to the trustee often because she charges 140$ and hour to talk about anything regarding the trust fund
Why is the trustee charging you money?? Unless, you've confused the trustee with the lawyer who created the trust (they are rarely the same person.)

And BTW, $24000 may sound like a lot of money, but believe me, it's not. I've known Trust Fund Kids who've burned through millions without any thought or care, until suddenly, they were flat broke.

Good on you for getting a loan from your older sister. But I strongly advise you not to borrow anything more than that, unless you need a heart transplant or something along those lines.

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Old 02-19-2014, 05:18 PM
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More than likely the reason that the person leaving you the inheritance specified that you won't receive the funds until you reach thirty to keep you from being stupid. Most people in their twenties absolutely suck at managing large sums of money. Most would buy a car, take some trips, etc.and blow it all in a year or two. By stipulating a waiting period I'm sure they were hoping that your priorities change and you'll be more responsible with the funds.

You may very well be a responsible person, but getting an advance through one of these places is a terrible use of the money. You will loose 20 - 30% to them in fees. Plus you'll loose another 20 -30% or more in taxes. Unless there is a very pressing need for the funds, wait the five years and get all that was left to you. Use those five years to plan what to do with those funds. If they are substantial, met with an investment advisor.

I made a wheelbarrow full of money in my early twenties and blew it all before I was thirty. Looking back I wish I had been more responsible and can't help but think how different my life would be now had I done the right thing with that money when I was younger. Instead I bought a new Porsche, dressed in the finest clothes and took incredible vacations and parties hard. I live a good life now, but a good friend of mine in the same business then was responsible, drove a Honda and invested his money. Today we are still friend zx, but he's worth in the neighborhood of $15 million, I'm certainly not. Take my advice for what its worth. Think ahead and your older self will thank you.
Old 02-19-2014, 08:20 PM
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When I was your age I would have been thinking the same thing as you. "But I want that money NOW!" But you have to think clearly. Your sister made it to 30 without an inheritance, so can you. Do you really want to think "Boy, I'd be screwed if my relative hadn't died in time?".

Pretend you know the future and you're going to win a small lottery in 5 years. Why put yourself in the position of finally waiting the five years and it's already spent?
Old 02-19-2014, 08:36 PM
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It basically comes down to this; you're borrowing the money to keep a car on the road. Your options are (a) borrow from your sister (which you've already done, and may be reluctant to do further), (b) borrow from the bank on the same terms as are available to people who don't have an inheritance coming in five years time, or (c) borrow against your expected inheritance.

You just need to grasp two things:

First, the less you borrow, the less it will cost you. What's the lowest possible amount you can spend, and still end up with a car which goes from A to B? Absolutely do not spend a penny more than that. And therefore do not borrow more than you need to be able to spend that amount. If this means you drive a crappy but functional car, drive a crappy but functional car.

Secondly, borrowing from your sister is cheaper than borrowing from the bank (if perhaps a little exploitative), and borrowing from the bank is almost certainly cheaper - much cheaper - than borrowing against your inheritance. Do not borrow against your inheritance until you have exhausted all other possible sources of funds.
Old 02-19-2014, 09:01 PM
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i was beginning to think this site was for people to just belittle your questions and grammar. so thanks!
Well, not JUST that
Old 02-19-2014, 11:20 PM
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Most people in their twenties absolutely suck at managing large sums of money. Most would buy a car, take some trips, etc.and blow it all in a year or two. By stipulating a waiting period I'm sure they were hoping that your priorities change and you'll be more responsible with the funds.
This is soooo true. Though the OP may not realize it yet.

When I turned 21, I looked back on my teenage years and thought, "Man, what an idiot I was...I'm so much smarter now!"

When I turned 30, I looked back on my 20's and thought, "Man, what an idiot I was...I'm so much smarter now!"

When I turned 40, I looked back on my 30's and thought, "Man, what an idiot I was...but at least I'm still smarter than most 50-year-olds!"
Old 02-20-2014, 01:12 AM
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The second part of the thread title, "should I do it?" is the important question.

The correct answer is "probably not," based on the little bit of information you have provided here.
Old 02-20-2014, 02:47 AM
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thanks that is a very helpful reply. i am reluctant to talk to the trustee often because she charges 140$ and hour to talk about anything regarding the trust fund and funny thing being on hold or her doing research or pulling files or information counts towards that charge. and sorry apparently my lack of care for grammar and punctuation on an internet forum pisses people off lol
I'm at a loss here--she charges 140 an hour to talk? That's not what a fucking trustee does. That's an abuse of her position, if trustee is what she really is.

Anyway, yeah. Get a regular loan from the bank where the trust account is held if you need some cash. Don't borrow against the trust but they know your accounts and they know you're not some guy off the street. Just make a point of talking to whoever's really in charge without being a dick about it--you've got money there. Not silly money, but at least significant money.

And do take care of capitalization and punctuation, for the same reason we don't leave the house without pants in the morning.
Old 02-20-2014, 09:00 AM
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While the question about exactly how inheritance loans work is factual, the second part of this (should I do it) is more of an advice and opinion question, and many of the answers are expressing advice and opinions. That makes this thread better suited to IMHO. Note that any factual aspects of the topic may still be answered there.

Moving thread from General Questions to In My Humble Opinion.
Old 02-20-2014, 10:11 AM
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My brother in law wanted to do this about 15 years ago when he inherited money that wasn't going to come his way for a bit, but needed the money now.

In short, he couldn't find a reputable bank that would loan him money with the inheritance as collateral. The reason - it wasn't his money until distribution - and things could happen that would make it non-distributable (there was, for instance, a drug use clause and a criminal behavior clause - get arrested or end up in rehab and money won't come your way). If he died before distribution, his creditors wouldn't get the money, it would be given to the other heirs.

And non reputable sources wanted usurious rates. This was a long time ago - but around 20%.
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Old 02-20-2014, 12:42 PM
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Originally Posted by Dangerosa View Post
My brother in law wanted to do this about 15 years ago when he inherited money that wasn't going to come his way for a bit, but needed the money now.
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.
Old 02-20-2014, 02:40 PM
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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.
Old 02-20-2014, 03:12 PM
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Quote:
Originally Posted by buddha_david View Post
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.
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.
Old 02-20-2014, 07:29 PM
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Originally Posted by ALOHA HATER View Post
I'm at a loss here--she charges 140 an hour to talk? That's not what a fucking trustee does. That's an abuse of her position, if trustee is what she really is.
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.
Old 02-20-2014, 10:20 PM
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Originally Posted by Really Not All That Bright View Post
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.
Old 02-21-2014, 03:19 AM
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That was excellent advice from wellanuff.

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.)
Old 02-22-2014, 08:49 PM
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Originally Posted by md2000 View Post
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.
thanks man great answer. this type of information is exactly what i hopped for when asking the question.
Old 02-22-2014, 09:05 PM
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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.

Last edited by Jimmyhat4; 02-22-2014 at 09:09 PM.
Old 02-22-2014, 09:14 PM
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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
Old 02-23-2014, 01:18 AM
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Originally Posted by Jimmyhat4 View Post
(mad cuz you are still living with your parents troll boy?)
Reported.
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