Should executors of inherited trust money be concerned that
they might be asked to become involved in helping federal employees (and
contractors) tide over during the “partial” government shutdown?
It sounds like a preposterous, shocking question, but I’m not
being facetious. It’s true, many federal
employees are well-paid and ought to have savings, but some (like TSA agents)
are not.
Presumably, credit unions can help for a while, although some
say they can’t handle it all. Banks and financial institutions are offering forbearance
programs. By February 1, many employees
will have hefty rent or mortgage payments. The media really hasn’t covered
landlord (at least large apartment complexes) attitudes toward this. People who
own rental properties might well be asked to accept much later rental payments.
And there is the whole world of payday
loan companies, which I know nothing about (but got calls about during my
post-employment period of the 2000’s).
For Coast Guard active duty members, if deployed they may be
OK, but their families might not.
There are specialty insurance companies, most
of all USAA, whom one would expect to help them.
The company I used to work
for, Voya (which was ING-ReliaStar then) has a subsidiary, USL (United Services
Life) which caters to the military and which might have unusual products that
can help.
I won’t get into detail about my own trusts here (check my WP site). But I can say what is common in many trusts
passed on as inheritances. Typically
there are declared beneficiaries, and the executor has some fiduciary
responsibility to protect the money (beyond necessary personal living expenses
like housing) for them. Sometimes there a provisions for small incremental
distributions. Often there is attention
to special needs beneficiaries.
Normally, being targeted in political extortion would, in my
book, qualify as a “special need”. So if
that does happen to a member of a family of a beneficiary, it would be common
that the beneficiary could request a grant of up to 1% of the estate value per year
(with multiple beneficiaries it would only work until used up, and it might
only apply to non-real estate) It is also
possible for a charity (a non-profit) to request this for a client (or minor
child of a client), but the client has to have an unusual need with compared to others of the charity, in a way that is meaningful to the trustee.
In a sense, the inherited estate is expected to act as a
private micro insurance policy to back up those in need when other systems fail
them. This is not (from an ‘Economic Invincibility”
perspective) a particularly good place to be, but inherited wealth is not as
morally secure as earned wealth.
Another idea to look at is socially responsible
investing. Right now I’ve stayed in
conservative stocks and bonds and notes (I have some Dominion Power because I want
to keep an eye on the power grid security issue). Some people like to assist
small businesses, especially overseas, with kiva or microloans. I am not in the business of playing
micro-bank, but I have wondered if any intermediaries exist that could help trusts
make loans in the cases of sudden special needs, even from political or natural
disaster issues. The novel nature of the
current crisis might preclude the likelihood that much exists now, because it wouldn’t
have been anticipated. However, in my case, the trust language explicitly
allows making loans personally, even for ventures like real estate or perhaps
AirBnb.
