The Reality of Trust Fund Size and Its Implications
The term trust fund can vary widely in value, yet the idea is often associated with a certain lifestyle. There is no definitive average, but estimates suggest that many trust funds can range from hundreds of thousands to several million dollars. Some reports indicate that some trust funds can average around $1 million, although this can significantly vary for affluent families.
Understanding the Typical Range
According to reports, trust funds can range considerably. While smaller funds might be around $100,000 to $300,000, larger funds can easily exceed $1,000,000. It is important to note that the specifics can vary greatly depending on individual circumstances.
Personal Anecdote: The Wells Fargo Experience
A personal experience from a decade ago illustrates the reality of trust fund sizes. During a time when my friend was dealing with the death of a grandparent, the representative at Wells Fargo trust management was dismissive of their trust fund with an asset balance of approximately $900,000. Based on this experience, I now assume that any trust fund with less than one million dollars can be considered a small trust fund.
Trust Fund Babies: A Derogatory Term Explained
The term trust fund baby is often used derogatorily to describe individuals who live off extravagant inheritances and lack a sense of the value of money or the effort required by the average working individual to earn a living. These individuals typically inherit several million dollars, which generates significant annual revenue for their spending.
An example from the TV show The West Wing provided insight. During one episode, the President asked his advisors about the cost of a gallon of milk, and none of them, except a young intern, knew the answer. Their detachment from everyday activities made it difficult for them to empathize with the average person. However, this episode serves as a metaphor for the world of the trust fund baby, illustrating a complete lack of connection to ordinary life.
Trust Fund Management Considerations
The economic soundness of a trust fund is crucial. A trust fund with an estimated value of $2,000 to $300,000 might not be sufficient to meet the terms of the trust and could be disapproved. Legal and financial experts advise against such small funds as they may not generate enough income to fulfill the trust's obligations.
The Dark Side of Trust Funds
Another reality of trust funds is the potential for unethical practices. Many children from trust fund backgrounds may never see a dime due to legal and financial shenanigans. One common issue is when a slimy lawyer neglects to inform beneficiaries about the trust, leading to a non-probate transfer. This results in the beneficiaries being taken advantage of, and might reek of family rape. Legal experts consider this as one of the worst crimes that can be committed against one's own family.
Unfortunately, such cases are common, and the legal system often fails to address them adequately. Many families wish to keep such matters confidential, contributing to a lack of public discourse about these issues.
It is clear that trust funds come with their own set of challenges and potential pitfalls. The size of the fund can significantly impact its viability, and the ethical considerations surrounding them are crucial for both beneficiaries and legal professionals.