Submitted by Professional-Gap2808 t3_zzy7hm in personalfinance

So I’m currently 17 years old, and I was recently accepted into a university early decision. I looked onto my college’s website, and I found out that my tuition will be about $80k a year (including housing + meals), and I assume my family will spend money to bring me home when school is out. I had several conversations with my mother about how exactly I will pay for school, and she said that the majority of my tuition will be payed through a trust fund that my father left me before he passed away. For most of my life, I chose not to ask my mother about the trust because I always heard her complain about how the long court battle she had trying to uphold the clause of her divorce agreement saying that if either she or my dad were to pass away before I was 18, they would leave all their money to me, but my father instead tried to leave some money to his friends and establish his lawyer friend as my trustee. Apparently, the fight got pretty nasty, and even though my mother was named a trustee by a judge later on, my dad’s lawyer friend used money from my trust fund to pay for his defense in the lawsuit. My mom also objected to paying someone to manage my stocks and bonds while we have family who are very successful hedge fund workers. After sitting down with my mom, I discovered that my trust fund is currently worth about $1.4 million in various stocks and bonds. The fund was set up about 3-4 years ago at around $1.1 million, and it has paid my $40-45k tuition at private school since then, and I guess it makes sense that its still gaining money if the annual return for this year was about 5.3% or $72k. I did see that the fund was worth about $1.8 million a year ago, but my hedge fund friend explained that some stocks have gone down in the past year, and they will for a bit in the future. The fund, however, is still where it was 2 years ago, and that’s after my mom took out $150-$200k to pay for expenses. My real question is what should I expect the next “changes” to my trust to look like, because even though my mother told me it will dissolve and ownership will be mine at around age 23, the trust was set up entirely for EDUCATION. Based on the way my mom talked about it, she didn’t expect me to have much of anything left by the time I finish college (and possibly grad school) since my trust has fluctuated a bit. I still thought that if I can generate $72k a year from the trust, and combine it with the $30-40k from my Mom’s 529, I wouldn’t see much of a change compared to now, and I could have $1 million by the time I’m 23. I just want to know how I can make the best investment in my education while preparing for my future, and having some sort of an estimate would be nice.

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Finapoo t1_j2ea25p wrote

I'd talk to your 'Hedge fund friend'. Sounds like they have a pretty good idea of what's going on...

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Professional-Gap2808 OP t1_j2ee6l7 wrote

I asked him about what he expects to happen for the next year or so, for which he had a decent idea, but for legal reasons he can’t manage the account

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BastidChimp t1_j2ebwn8 wrote

Go to school, don't worry about your trust fund and pretend it doesn't exist. If you can find employment (internship) especially during the summer break, choose something that suits your degree and education. This will allow you to earn a small salary and network while building bridges to transition to the workforce.

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Professional-Gap2808 OP t1_j2eenzy wrote

This actually helps. I’m planning on either doing some internship or joining a research team, but maybe not for a salary. I’ve already heard that students from my school do get recruited into decent jobs, but my family tells me the importance of getting at least a master’s degree, which I am debating about attempting in 5 years.

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BastidChimp t1_j2ega53 wrote

👍👍👍👍👍👍Before you apply for your master's, get into the workforce first. During the interview process, ask your future employer if they can fund your education. Some companies have programs that will pay for your graduate education while still being employed. Or better yet ask during your internship.

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Professional-Gap2808 OP t1_j2eqbne wrote

Yeah, I would want to find opportunities through school-sponsored internships, but I’m not sure if I would want to take a year off after college to join the workforce if I were to go to grad school. Honestly, I could change my mind if I need a break and want to evaluate my options, but my family tells me the longer I’m in school, the later I have to start working, which is for the better.

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Professional-Gap2808 OP t1_j2eqiz6 wrote

I’d also say that I’m considering doing something where I could TA certain classes during my fourth year while taking certain grad-level classes, and finish my master’s in a fifth year at half tuition. That way I could save 75% of what I would be paying for grad school.

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FireBreather7575 t1_j2elt1f wrote

I would think about what your goal is. A lot of “old school” families think higher degrees create greater wealth and job protection. Not always. Want to go into finance? Masters won’t do you much.

You seem to have the resources to figure out what you want to do, whether it be making money long term or following a passion

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Professional-Gap2808 OP t1_j2epzno wrote

I’m thinking of either doing something in math/physics or even maybe engineering (I have some time to decide), so I could see myself looking for a career through research teams. I know a lot of people who just finished with their bachelor’s and ended up doing something in finance/banking, but this might be somewhere where I need an extra year or two of grad school.

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baby__steps t1_j2egte0 wrote

No real advice for your current situation, other than best wishes.

However, you have an excellent opportunity to get real ahead in life if you’re smart and strategic with this situation. Do not concave to the peer pressure and other things that you will experience in college. Plus, with all that money post college. Sure, have fun - but make good choices all throughout. As I tell my 16 y/o, every choice has a consequence; good or bad. Watch out for peer pressure with drinking and drugs - particularly pills. It’s a nasty, nasty world out there, kid.

Best wishes!

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ObservantWon t1_j2eke8w wrote

80k/year for college? What are you majoring in? Can you find a school for half that cost? Seems like an absolute waste, even with $1.4 million in the bank. Especially if you’re lookin at grad school afterwards. I’m all for education, but $80k/year is wild.

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Professional-Gap2808 OP t1_j2eqxw4 wrote

I’m already committed because of ED, and I did get into a school that gave some some scholarship money too, but I didn’t like it as much as where I’m going. I’m planning on majoring in either math/physics or engineering, and the school I’m going to is around T30-T40 for both (as well as it’s national ranking overall), and it should be a good investment for grad school + job placement.

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deangelo88 t1_j2fdc17 wrote

No one can predict what the changes would be.

More importantly, you should be giving consideration to the following:

What state is this happening in?

If you haven't already seen a copy of the trust, you should ask your mother to let you see a copy of it. That is your right as a beneficiary. You also have the right to annual accounting statements from the trust, but your request to your mother should be in writing or have your trust attorney make the request for you.

Ask your mother who the successor trustee is, if something unexpected (death or severe illness or mental incapacity) happened to her.

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