Handle in the easiest way you can

Casadena

Six years ago, my sister unexpectedly died. She left a large part of her estate to my two nephews and “Maya,” the daughter of her best friend, “Josie.” I have control over the trust, and it states that the money should be used for educational purposes. It isn’t a problem since my nephews are both college age, but Maya is still in elementary school. Tragically, Josie died last year. I went to the funeral but only had sporadic contact with the family until recently. Josie’s widower has been increasingly calling me about Maya’s money.

It has gone from plausible (paying for dance lessons) to impossible (her day camp will only accept cash, and he will give it to them). The last conversation had him threatening me. It left me very shaken, and I am wondering about what to do next. I love and miss my sister, but I was never close to Josie or Maya. I really don’t want to deal with this for the next decade. Is it wrong to just dump Maya’s portion in a 529 plan and be done with it? The trust allows me to.

CharmedPam

It sounds like Maya won’t have it when she’s ready to go to school if she wants to do that (if the widower can take it out for incidentals). I’d say no and tell the widower it now can’t be touched till she’s ready to know what to do with it. 

ei34

I think of educational trusts more for college and graduate school than camps and dance lessons (though I could certainly be wrong).  However, bc Josie's widower is pissing me off, I would be tempted to put it into a 529 if I were the LW.  Those can be used for more than a bachelors - elementary and secondary school, grad school, trade schools, vocational schools, student loans, room and board, etc.  Bc right now he's treating LW like an ATM and I doubt that is what the late sister had in mind.  I feel sad for the daughter.

short+sassy

I don't know enough about a 529 or how it would be set up to say if that would alleviate the LW of having to talk to the Josie's widower.

I'd also want to make sure this guy is Maya's legal guardian.  He probably is, but it's possible he's not.

Most importantly, he does NOT get to threaten and harass the LW.  I'd tell him all future communications need to be through an intermediary or his attorney, but he is not allowed to contact me any further.  If he violates that, file for a restraining order.

banana468

I think the 529 can be tempting but hard if the daughter wants to use it for anything else or doesn't go to college.   Years ago we chose not to make them when the kids were younger because if either kiddo wanted to go off to study a trade they wouldn't' be usable.

That said, I'd absolutely talk to a lawyer about this.  It can't be the first situation and obviously this is a dad who is lying so it's time to come up with a plan so this kid doesn't fall victim to dad's shenanigans. 

short+sassy

banana468 said:

I think the 529 can be tempting but hard if the daughter wants to use it for anything else or doesn't go to college.   Years ago we chose not to make them when the kids were younger because if either kiddo wanted to go off to study a trade they wouldn't' be usable.

That said, I'd absolutely talk to a lawyer about this.  It can't be the first situation and obviously this is a dad who is lying so it's time to come up with a plan so this kid doesn't fall victim to dad's shenanigans. 

They can be used for trade schools!  I just Googled it because I was pretty sure, but not 100%.

They can also be used for foreign, qualified universities.  

The money can also be withdrawn without penalty if the child (or as an adult) becomes disabled.

I THINK the money can be withdrawn whenever someone with authorization wants to, but then there are stiff penalties.