Author Topic: How to find a good trustee for a non-senior, but somewhat feeble-minded, person?  (Read 668 times)

Candace

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Hello Mustache Community,

This is a weird one. I know a lady in her early 50's (let's call her W) who should be getting somewhere between a few hundred thousand dollars and maybe half a million dollars in a settlement sometime in the next several months. It should be at least four months away, perhaps as much as a year away. She is in Virginia.

W is, hmm, not quite sharp. She has been damaged by childhood trauma and taken advantage of as an adult. She's not quite mentally challenged, but I would describe her as somewhat feeble-minded and susceptible. Once she receives her settlement, I am concerned that given her history, she could be easily fleeced or conned out of large sums. W is open to the idea of having a trustee, if that is even the correct word. This trustee (presumably employed by a company that has expertise in this area) would have all or some control over W's nest egg, with perhaps an allowance every month and flexibility to ask the trustee for more. Then the trustee would make sure the request isn't to fund some unscrupulous boyfriend's spending spree or flight money.

I'm aware that there are companies who do this for the elderly, since they can become more vulnerable to scammers as their mental capabilities decline with age. I am considering trying to find a company/person/agency/what? to provide a similar service for W. Although W is not elderly, she seems to have some of the same vulnerabilities as an elderly person who's lost some of their faculties. Again, W is open to this idea as she is aware she's been conned at various points in her life. I wouldn't push the idea on her if she were to push back. And I don't want the conflict of interest of doing it myself.

Does anyone know how to find an upstanding, fairly priced service like this? I don't even know exactly what it is that I'm looking for, which is probably obvious. Thank you for any suggestions.

Liberty Stache

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I don't personally know much about these (what would a fair deal be for $500K, which companies are reputable, etc.) but you might want to think about / talk her into a decent annuity. Guarantees she gets some income on an ongoing basis for the rest of her life and that she can't piss it away/get 'fleeced' in a short period of time.
"Sloth, like rust, consumes faster than labor wears, while the used key is always bright" ~Benjamin Franklin, The Way to Wealth

Candace

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I don't personally know much about these (what would a fair deal be for $500K, which companies are reputable, etc.) but you might want to think about / talk her into a decent annuity. Guarantees she gets some income on an ongoing basis for the rest of her life and that she can't piss it away/get 'fleeced' in a short period of time.
Thank you Liberty Stache. That seems like it could be a decent Plan B, although then she may not get to pass on any wealth that's left when she eventually dies? But definitely something to keep in mind as long as it's irrevocable, so someone couldn't convince her to cash it out for some "sure-fire" investment opportunity or other such bullshit.

Chrissy

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Liberty Stache's idea is definitely worth researching, and may be the simplest solution.

You mention "trustee" because you're probably thinking of a trust, which are set up through lawyers, and I think the lawyer who sets up the trust may also administer the trust.  Look for a reputable lawyer in your area with experience in trusts, and have a consultation.  I believe they charge an annual fee to act as trustee which is some percentage of the trust (but ask, don't take my word for it).

Candace

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Liberty Stache's idea is definitely worth researching, and may be the simplest solution.

You mention "trustee" because you're probably thinking of a trust, which are set up through lawyers, and I think the lawyer who sets up the trust may also administer the trust.  Look for a reputable lawyer in your area with experience in trusts, and have a consultation.  I believe they charge an annual fee to act as trustee which is some percentage of the trust (but ask, don't take my word for it).
Seems like having a reputable law firm set up a trust and act as a trustee might be the best thing. That way it can be managed so as to pass on her wealth later, or perhaps be used for her care if she requires that.

sui generis

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Agreed on a trust and yes, you can definitely engage the services of a trustee (doesn't have to be a lawyer, but because of their ethical duties to any client, it's not a bad idea).  W is not technically mentally incapacitated or disabled, but you could read about a Special Needs Trust to get a sense of some sort of options people consider for a beneficiary that may need special protection.  Also see discussion here of the Self-Settled, In-Out Trust, again just for some basic concepts that may be useful: https://www.specialneedsalliance.org/consider-special-purpose-trusts-when-facing-mental-illness-or-substance-abuse/

Candace

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Agreed on a trust and yes, you can definitely engage the services of a trustee (doesn't have to be a lawyer, but because of their ethical duties to any client, it's not a bad idea).  W is not technically mentally incapacitated or disabled, but you could read about a Special Needs Trust to get a sense of some sort of options people consider for a beneficiary that may need special protection.  Also see discussion here of the Self-Settled, In-Out Trust, again just for some basic concepts that may be useful: https://www.specialneedsalliance.org/consider-special-purpose-trusts-when-facing-mental-illness-or-substance-abuse/
Very interesting and educational. Thank you. I found this: http://commonwealthcommunitytrust.org/resources/resources/1455-2/ . I'm not sure W would qualify, given that she's not what I normally think of as Special Needs, and also that her self-funding source wouldn't be from any of the ones listed, but I might give these folks a call and check them out. The Pooled Trust is quite interesting because the non-profit administers the pool of trusts for many people, and so claim to be able to charge lower fees and diversify investments. Kind of like a mutual fund account. I also like that their Board has people who are related to the beneficiaries of these trusts.

I adore this community. I feel so much better informed than I was only a few hours ago. At least I feel like I know the correct direction to be heading in. Thank you to everyone.

Noodle

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I am acquainted with a lady who runs a fiduciary services business which sounds exactly like the kind of thing you are looking for! I believe she works with clients of all ages although the largest proportion are elderly (and she also does estate work.)

Candace

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I am acquainted with a lady who runs a fiduciary services business which sounds exactly like the kind of thing you are looking for! I believe she works with clients of all ages although the largest proportion are elderly (and she also does estate work.)
Hi Noodle. Thanks for the referral. Is your acquaintance in Virginia? If so, please feel free to PM me her contact information, or reply to this thread with it. We still have several months before we need a plan, so nothing will happen immediately. It sounds like we'll be considering law firms and other firms like Commonwealth Community Trust and fiduciary services firms like what you describe.

Noodle

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She is not, unfortunately! I do know that she gets a lot of her business from estate and eldercare attorneys, so that might be somewhere to go for a referral locally. Good luck finding someone excellent!