[dlsmith718]

In 1997 an irrevokable trust was created for me by my dad who is still alive. The money is in a private bank and they are the fiduciary.I began to receive paymants from the trust at $25 a month. Each year that amount was to increased by $25 or not more than half the interest earned, which ever is the lessor amount. The trust is to solely benefit me,and can be used for education,medical, or desitution (but if I do, it would anger my dad). By 2006 I was receiving $275 a month, then the stocks went down and in 2007 I was only getting $200 a month.As of today, my trust fund has regained all assests and has increased in value. In 2006 it had $340,000 and dropped to $267,000, and is now at $364,000. Should I be receiving at least the monthly payments I had in 2006? Or should I be getting the $425 a month which is where I should have been at by now on the payment schedule? I am a divorced mom with 2 minor children for whom I am their sole financial and physical supporter. The extra cash would help us out right now as my job fired 2 other employees and cut me down to working 1 day a week. It's been tough finding work that fits the kids scheduals. Thanks in advance for any input you can provide me.

[ScottGem]

Without seeing the exact wording of the trust document. I would say that the stipend should never decrease, but may not increase. So, if it increased by $25 one year, then by $10 by next year. Then in the 3rd year there was no income going into the trust, in fact it lost. While this might mean no increase, it shouldn't be a decrease, unless the trust provided for that.

Another issue is that you use the term interest. But if the trust is invested in stocks then it doesn't earn interest. Income to the trust would be from dividends or from stock trading. If you have a copy of the trust document, I would have an financial consultant look it over.

[dlsmith718]

Thanks for the response! The private bank has the money invested in a diverse portfolio. It earns money from both interest and dividends. I know cause when I file my schedule K form at tax time, the bank tells me what portion was interest, what portion was dividends, and what portion was from over seas investments which paid foreign taxes. And as I said to the trust terms, it spelled out that I was to receive a $25 dollar increase each year or no more than half of the trusts earnings (from interest/dividends) which ever amount is the lessor (believe me, $25 was always the lessor amount). It does not state anything about a decreased payout at all. For last year, the trust earned $7000 and I was paid from that $2400.My concern is that I have received 0 pay increase as ordered in the trust, but clearly the trust is earning enough to give me my increase.

[ScottGem]

Like I said, unless the trust document provided for reducing the stipend, then it cannot be reduced but it doesn't have to be increased. When is the stipend determined? I would imagine that it is determined once a year depending on the previous years performance. Also there may be the issue that the stipend is determined by the total payout.

If the trust was established in 1997, your stipend (if sufficient income was made) would be about $375/mth (You said $425 so I may be counting the years wrong). But if the trust's income for the year was less than $5K, there would not be enough to pay out without touching the principal And that may be against the trust's rules.

But if the trust's earnings in 2012 were $7K, there there should have been enough to give you the full increase for 2013. Is there an explanation of why you didn't get an increase?

[joypulv]

Banks make mistakes. I would ask them, and even your dad. My parents each had a trust and mistakes were made!