2

There are several types of accounts that I would like to pay into and never payout from until a certain need arises, however I am not sure I have the discipline to not tap into them in-case of financial hardships.

I would like to safeguard the amounts from two things: [NOTE I am located in the US]

  1. Such that I cannot tap into them alone, or at least not without fulfilling their purpose
  2. They could not be seized in the event of bankruptcy or lawsuit

I was wondering If it's possible, if there is a name for these kind of accounts, and how to open one.

Several ideas for such accounts are..

  1. Instead of life insurance for my mother, My brother and I put $30/month each into a savings account, We cannot access the money until our mother dies. It will be used for burial costs, and then we split the rest.

  2. Charitable giving account. Me and two friends pool our resources to make gifts that have greater impact. We deposit $100/month into an account for charitable giving. Then all 3 of us need to agree on where we want to make a donation. If we cannot agree, or someone dies the money goes to a charity we all agreed on beforehand.

These are just some ideas. Does anyone know how to get started?

  • 1
    To get a focused answer you will have to specify the country. – mhoran_psprep Jun 3 '18 at 11:30
  • 1
    The key term you are looking for is "trust funds" (at least in North America). They are for money set aside for a specific purpose. However be aware that they are not simple or cheap to set up. – DJClayworth Jun 3 '18 at 17:28
2

These questions relate to the law of trusts and probate. An attorney should be able to advise you.

For a trust to operate, someone (usually a third party) has to be appointed as a trustee who owns the assets until they are used to serve the beneficiary (the person who gets the benefit of the trust). Unfortunately as trustees assume legal responsibility and have a fiduciary duty, they can be expensive.

If you are a beneficiary, your 'beneficial interest' can still be seized by a creditor or more specifically, the bankruptcy trustee in a bankruptcy proceeding or lawsuit.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.