True Story: I have a trust fund

What if you had a trust fund? Would you stop working? Change your shopping habits? A super interesting interview with one woman who has a trust fund! //

What would life be like if you had a trust fund? Would life be stress-free? Or would you feel guilt over inheriting money you didn’t earn? This is one woman’s story about having a trust fund and how she feels about it.

Tell us a bit about yourself!

I’m a 29-year-old health care provider living in Philadelphia.  I love cooking, reading dystopian fiction, and board games!  I grew up in a small city in the Midwest then moved to assorted East Coast cities for college and grad school.

For those of us who don’t know, what’s a trust fund?

A trust fund is a fund of money established by a grantor (typically parents or grandparents) to provide support to a child.  This money is typically wrapped up in a series of restrictions, such as requiring permission from the parent or another trustee before it can be used or that certain amounts are only made available at certain ages.

Other requirements can be that that the funds need to be used for educational use, or that the child must have a college degree, be married, or have a child before accessing the funds.

Typically trustees are parents, but can also be family friends, siblings, or financial advisers. Those financial advisers are typically involved to ensure proper investment and management of the fund though for some trust funds, the beneficiary is able to take over managing the fund.

What is your family like? 

I grew up with my mom and three siblings.  My siblings are in college or working, pretty typical for their ages.  My mom was a stay-at-home parent and utilized her own trust fund (as well as a Children’s Trust set up by herself and her mother to provide funds for us) to allow herself to be at home with us full time while we were growing up.  She is a CPA by trade.

When we were born, she chose to move from the large city she lived to the place she grew up, because she knew it had a much lower cost of living and she would be able to use the money she had more efficiently.  Because of that, I also didn’t grow up in a community where many people had a lot of money, and so I never really fell into the name brand clothes/fancy cars/new electronics way of life.

How did you come to have a trust fund? Do you remember when you first learned that you had one?
My grandfather worked very hard and was able to make a lot of money while he was living, through real estate management/sales and a car dealership. He also made very good decisions about investing, providing these supports to my mom and then to us. Additionally, the money my grandmother had went into trusts both before and after she passed away.
I’m not really sure when I first learned I had a trust fund.  I’m fairly sure it was sometime in early elementary school and was part of a conversation about why my mom didn’t have a job “like all the other moms.”
It seems to be something I always knew, because the money that supported us had to be coming from somewhere, and my mom wasn’t going to work. She did do a lot of volunteer work, however, and put her skills and training to use in committee and board positions for organizations she supports.
How old were you when you got access to your trust fund?  How is your trust fund set up? 

I have two trust funds.  One is only for educational costs (tuition, books, etc), and that has been used to pay for my private elementary school, and for college/grad school.  I do not have access to that fund, and need to request that the trustees (my mother and her friend) transfer the funds into my account.

I have access to the educational trust via trustees (my mom and another family friend).  For all of my graduate school expenses, they needed to each sign a form agreeing to the amount of money for tuition, then it was transferred to my account so I could pay tuition.

In college, my mother was the one who made the tuition payments from the account.  Any money I don’t use for school expenses of my own transfers to my children for their school expenses.

The other trust is a little more accessible.  Until I was 25, my mother had to give permission, but I am now able to directly request a certain amount of funds from the financial advisor. Every 5 years until I am 50, I am able to access more and more of the fund.
When I was in Americorps and during graduate school, I got a set amount monthly, to cover living expenses (rent, food), some amount of travel, entertainment, and other personal costs. Typically this was about $1,000 monthly and I frequently didn’t use all of it. I also worked while in school to supplement these funds as needed.
Unlike many trust funds, I didn’t get full access to the fund at 18, 21, or college graduation. I think that was definitely a good call on my family’s part–it seems it would be difficult to manage that large amount of money responsibly as a teenager/ young adult.
Our family also has a charitable trust, that we use for donations.  A set amount of that money (I am not sure the amount) needs to be donated each year and we typically go above that limit. My mom is in charge of that but I can make suggestions.

Some of my younger siblings are not the most financially responsible people.  For now, they are not as aware of the amount of money available, and provisions have been made so that they are not able to access the money as freely until they have college degrees and hit a certain age.

How much money do you get through your trust fund?  

There was enough money in the educational trust to pay for my undergrad and graduate (masters) degrees debt free.  I actually don’t really know (or want to know) how much is in my personal trust, but I have been told it is enough for a down payment on a house.
What sorts of freedoms does this extra money allow you?

The money allows me the freedom to do the things I want to.  I could go to private schools for college and grad school without being worried about being in debt for a long time.  If emergencies come up, I know I can afford a last minute plane ticket.

If I got fired from my job, I could afford to take some time to look for a new job without needing to get a new one immediately. I live in a city, buy organic produce, and sometimes buy things on Amazon that I don’t really need.

However, I also live in a student area, buy clothes at thrift stores, and take the bus to visit friends instead of Amtrak. I try to use as little of the money as possible, because I don’t want to blow through it, but also because I want to know that I could live without it if I needed/wanted to.

Do the people in your life know you have a trust fund? 

No one in my life knows, really.  I think some people know I have access to money, or that my family has some money, but I don’t think anyone realizes the amount.

I have a lot of complex emotions about having a trust fund.  I feel like I shouldn’t use it, or I should give all of it away to people in my life who are struggling with debt or other financial issues.  I’m a naturally frugal person (perhaps as a counter for other family members not being so aware) and don’t like to spend a lot of money.  I chose to cook at home, take the bus instead of the train or flying, and shop at thrift stores.

When I choose not to do expensive things with friends, I feel like I am lying about not being able to afford it.   I don’t want to make things awkward or uncomfortable for anyone.  I got some negative feedback/teasing in elementary school, particularly about my mom not working, but never since then that I know of.

Are there any drawbacks to having a trust fund?

I think the drawbacks really depend on your personality and the community you are in.  Growing up in certain areas where having a trust fund is more typical, I can see it being more acceptable.  For me, I have a lot of guilt and shame about it.

I struggle with the fact that I was able to pay for school while so many of my friends will be in debt for a long time.  I was able to do an Americorps program and live below minimum wage because I had the additional support from my trust.

Many people I know are not able to do these things.  I also tend to be a frugal person, and there are times I feel conflicted living my own lifestyle and not wanting to do things due to the cost, even though I know if I really did want to, I could afford it.

People don’t really talk about money.  I don’t have much of an idea how much money my friends families have, and so I feel the need to act frugally “just like everyone else,” especially right after college.  I accidentally “out” myself sometimes.

Recently a friend and I were talking about how she wants to be a stay at home mom but she couldn’t understand ever needing babysitters.  I mentioned that my stay-at-home mom had them sometimes, and she remembered that I had said my mom was a single parent.  It then led to the “how did she support” you question, which I tried to awkwardly deflect.

If you have children, would you set up a trust fund for them?

Some of the funds I have will automatically transition to my children.  Whatever is remaining in my educational fund after I finish graduate school may then only be used for my children’s educational expenses.  I fully intend to use these money for them.

I do think I’d work to set up a fund for my children as well, though my salary is nowhere near what my grandfather’s was, and the cost of living where I am currently is much higher than where my mother and I grew up.

I would like to know that my children wouldn’t have to worry about being able to support themselves in emergent situations but also don’t want them to become the drugs/couture/unemployed trust fund stereotype. I hope to also instill in them a sense of financial responsibility.

Thanks so much for sharing your story, friend. Do you guys have any questions for her? Have any of you inherited a significant amount of money? 

P.S. How to save money without hating your life + How to pay off your soul-crushing debt (a lot) faster

Photos  by Luke Bender and Karl Magnuson on Unsplash

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  1. Lauren

    I don’t have a trust fund, however I come from a family where my parents both earned decent wages. While I paid for my own Uni degree (in Australia we are able to ‘borrow’ the money from the government and pay it back out of our wage after we make a certain amount of money) my parents paid for my rent during this time, and they also bought me my first car and the car I have currently. I’m very lucky and very appreciative of this, however I know it caused a lot of hostility with friends who weren’t so lucky to have parental financial support. There was definitely no bragging on my part, but people pick up on things when you can pay for stuff even though you only work casually.

    You sound like you’ve got a good head on your shoulders!

  2. Mari

    I also have access to assets from my family- I was really uncomfortable talking about it and minimized my access to money with my friends for a long time. I was really conflicted when talking about money because I felt like I couldn’t be authentic. As I became more involved in social justice work, I started doing more work around my own class privilege and became more open, although I don’t talk numbers with many people…Resource Generation, an organization that helps young people with wealth mobilize for social change, was really helpful for me.

  3. Katie

    I’m kind of the opposite. I don’t have access to funds or a trust, but people often assume I do. An example is I was telling a family friend how I think it would be cool to volunteer for a political campaign for all of 2016. And the person’s response was “do it, I know your parents can cover you”. Which is 100% not the case. So I completely understand why this person wouldn’t share that they actually could take a year off from work if they wanted to.

    • Darrel

      So you dont really have total access to the money

  4. Suzy Anon

    My family has never had any wealth, and I would have no idea where to even start to set up these things. It feels like a top secret operation. I guess you would start by hiring a CPA??

  5. The Jadeite Shutter Blog

    You know, I think it’s important to know privilege in these conversations– especially because I’m assuming this woman is white.

    This statement: “My grandfather worked very hard and was able to make a lot of money while he was living” is exactly the kind of thing I’ve heard from other trustfundians and I like to remind them that for the most part– all of our grandparents worked hard. Working hard doesn’t equate wealth. In fact, wealth is built by a few other things: type of work, where one lives, education, gender, race and of course: access.

    For the most part I think you seem well adjusted. I’ve known quite a few other people with trust funds of various sizes and in my experience I think it can (more often than not) often be a determent: you don’t learn what it’s like to really have to survive on your own, sometimes there can be a disconnect as a result with your peers, and I think it makes dating/marriage interesting. I know one woman with a trust fund in her early 30s that has truly floundered (both professionally and personally) when it comes to finding a job she enjoys. If she didn’t have access to so much money I imagine she’d be more motivated, though I do agree that it is a nice thing to have should you lose your job and not want to find something immediately.

  6. Whitney

    I went through 3.5 years of undergraduate study at an expensive private college with only need-based financial assistance before my father mentioned that I had a nice sum of money waiting for me at age 24 to pay off whatever student loans I hadn’t tackled by then. My upbringing was modest, with only one parent healthy enough to work. My step-brother, who was 16 years older than me, was also granted a similar trust fund. I vaguely recall him showing up at the house with a new car every few months, but it took me a long time to realize that he was using the trust fund money.

    I suppose it was my brother’s blunders, along with hearing “always live within your means” on a regular basis, that I accessed my fund money with the strictest of measures: student loans and graduate school application costs. Other than that, the money sits in a CD and awaits proper investment. Thinking about how I should do something to make that money work for me, but lack the financial know-how, is a constant stress on me. I also feel as if that money doesn’t belong to me, because I didn’t work to earn it. I certainly have a complicated relationship to that money, too afraid to “blow it” on materialism and waiting to use it for some incubating vision. I am relieved to have found other people who feel that their relationship with their trust money is complex.

    It’s a privilege to have a nice cushion of money apart from everyday living costs where I have the space to think “I should be making that money work for me” and even admitting to that makes me feel guilty and over-privileged.

  7. Peaches

    My paternal grandparents left their money in trusts for their grandchildren, so for my generation. I think I sort of knew about it for a while, but since it was strictly for large, responsible life events like college or house down payments I never gave it much thought.

    Then I decided to go to an expensive private school for college, and my parents gave me the choice of using my trust money to pay for my first year or save it for a down payment. I chose to use it for school – I had no idea where I wanted to go after college and I was concerned about paying for it otherwise. No regrets there, I live in San Francisco now and it wouldn’t be enough for a down payment here. 🙂

    I was privileged enough to graduate without any loans, and that’s worth renting for a while longer.

  8. Ava

    I’m also a trust fund baby. I never tell anyone because I still feel sorta uneasy talking about it. It’s something that is something I try to hide around others.

    The really sad and hard part is that I lost some friends because they couldn’t phantom the fact that a lot of my big expenses like my home and car and college were all paid for.

    Honestly It’s hard and very awkward and uncomfortable for me to have a normal conversation with people my age and especially much older that have to work at a job m-f to survive. I respect all hard workers. It’s just uneasy for me to talk about money with them. I rather talk about other topics such as spirituality and how we can help humanity in a positive way. I am very grateful for my grandparents and my parents deeds. I want to do good deeds ij world and I’m also big on charity and give lots in donations from time to time.

  9. Lacee

    My dad died in December 2017 & left me a trust fund that my brother controls. I am 49 years old (I’ll be 50 in May 2018). How do I get access to my trust fund?

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