Wow, thank you to everyone for all of the great advice. I've actually been reading a lot lately and trying to formulate some sort of strategy. Additionally, it occurred to me that I was not precise enough when I suggested that I was hesitant to manage my own money. Aside from not being actively engaged in studying the market, my bigger concern is simply the nuts and bolts of managing money. This sounds really naive, I realize, but how complicated/ time consuming is it to do what the bank currently does for me? As I understand it, they receive dividend checks from my stocks, buy CDs, buy bonds, etc., then, when the bonds and CDS mature, they reinvest that money in either more stock, more bonds or more CDs. And, of course, for doing this they get a certain fee. Could I reasonably do this myself and avoid the bank fees? Or is it just a blizzard of paperwork that is best left to other people?Anyway, there is a lot to consider. I am toying with the idea of having the bank transfer a certain percentage to my name and then investing it myself, just to get a feel for it. That is, after all, exactly what my relative wanted me to do. If all goes well, then I could simply assume the management of the money myself.
This sounds really naive, I realize, but how complicated/ time consuming is it to do what the bank currently does for me? As I understand it, they receive dividend checks from my stocks, buy CDs, buy bonds, etc., then, when the bonds and CDS mature, they reinvest that money in either more stock, more bonds or more CDs. And, of course, for doing this they get a certain fee. As far as collecting income and reinvesting, etc., is that really all the bank does as trustee? Is there much trading activity involved? Up until now there has also been annual tax reporting for the trust, and possibly additional work, if the trust is under court supervision.Could I reasonably do this myself and avoid the bank fees? Or is it just a blizzard of paperwork that is best left to other people? Well, to a certain extent it depends on the individual - some people find investments more intimidating than others. I often say it's like fixing your own car. Some people love to do it. Others do it to save money. Others wouldn't know where to begin. Others could do it, but don't want to spend the time.And if you keep assets in a brokerage account, the recordkeeping information is much more centralized and summarized. The actual paperwork is not necesarrily that bad. You only get one 1099 for tax purposes, for example.As you indicated in your initial post, you're coming to a transition no matter what you do. The trust is about to terminate and WILL, legally, come under your control. You have a right to the money. The bank is urging you to create a living trust with you and the bank as co-trustees. This MAY be a very good idea. Of course, the bank wants to stay in the picture. You should talk to YOUR lawyer (not theirs) about that. By the way, some banks would not consider a $700,000 trust to be very interesting. This makes me think it's not a very large bank.You MIGHT ask them something like this:"Since the trust is now terminating, what if I left the assets here, but in a custodial or agency account, as opposed to a trust? How much lower would your fees be, as you would no longer be the actual trustee?" See how much they blink at that. They'll know you've been checking around. By the way, the answer should be significant. If it isn't, think more about making a move.Anyway, there is a lot to consider. I am toying with the idea of having the bank transfer a certain percentage to my name and then investing it myself, just to get a feel for it. That is, after all, exactly what my relative wanted me to do. If all goes well, then I could simply assume the management of the money myself. That may very well be the wisest course for the moment.Bill
You might consider Fidelity's trust service, probably lower fees than your local bank and gives you access to some low fee index mutual funds.http://personal.fidelity.com/products/wealth/?bar=c
I personally feel that you are not experienced enough to manage it by yourself as I said in my previous post and you talked about in your post. Are you a male or female? If you are a female, you need to be careful with that amount of money so someone doesn't try to take advantage of you. I would get the help/advice of a experienced trusted friend or relative to help you make some of the decisions. With that amount of money, you need a very good financial advisor to help you. That is what I would do. As I said in my previous post, your investments need to be diversified. I personally would not have a bank invest an account of that size, especially if it is a small one. People at small banks are not financial experts. That is a vast generalization of course. You are much better off in my opinion going with an investment advisor. As I said, you can interview different ones before going with one. The most important thing in my opinion right now is to become familiar with exactly where your money is invested. I would also speak with an attorney so you understand all of the legalities of a trust. You will need an attorney to look at all of the paperwork whatever you do as far as I know. I personally wouldn't do it without the advice of an attorney. Just make sure it is a good one. Investments in stocks are not considered low risk. That is why I asked how much of it is invested in stocks. As far as the paperwork, I wouldn't be concerned about that. If a stock pays a dividend, you can sign up for a dividend reinvestment program. With that, all of your dividends are automatically reinvested, and there isn't any paperwork. I heard Susy Orman say once that "No one cares about your money more than you". That is a very good thing to remember. She also says not to invest anything in the stock market that you can't afford to lose. I would suggest submitting your question to Suze Orman's program and see if they take it. Speak to as many people and experts as you can. That will cut your learning curve in half. Reading and learning is great, but it will take too long. My family managed a pretty good size estate, so that is where some of my knowledge comes from. It was larger than what you have.
Are you a male or female? If you are a female, you need to be careful with that amount of money so someone doesn't try to take advantage of you.Wow, I didn't realize being female caused a person to be more vulnerable to making bad investments decisions.I could understand if we lived in Afghanistan under Taliban rules, but last I heard women in America are allowed to get an education, visit libraries, and use the internet if they have the desire to learn about basic investing and money management.Men are no different... I know lots of guys who are also clueless about this stuff.And on the flip side, the "someone" who may take advantage of her could just as easily be a male or female shark.Gromit
My comment has nothing to do with a woman's ability to make investment decisions. That is not what I said. I'm a woman and yes, do I think I'm smarter than some men.What I said was that the person needs to be careful that they don't get taken advantage of. This is the case with a male or female. The amount of money being discussed is a pretty good amount of money, that is why I made that point. That is why I recommended having another person like a relative and good friend to ask for advice instead of doing everything alone. I also said a very good attorney is needed for the legal aspect of it.
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