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| A TRUSTEE WHO ASKED, "WHAT'S A MUTUAL FUND?" After one of my seminars in Prince William County, Virginia, just outside Washington, DC, a young lady of 29 years appeared for her estate planning session. She said, "I am here because of my husband's death." "On Thanksgiving Day, 1990, my husband, a Prince William County Police Officer, went on a drug raid. When he kicked the door open, the crook got off one shot ... to my husband's brain. He died almost immediately." She continued, "The Fraternal Order of Police gave me $350,000.00 as a widow's gift." "They also gave me $350,000.00 in trust for my son, age 7. "I am the trustee of my son's trust." She further explained that she, too, worked at the Police Department as a dispatcher ... and that she had put all the money into the bank, had paid off the car and all the money was now drawing interest in the bank. "I took off from work for six months to be close to my son; but, I am now back to work," she elucidated. I could see that the money, in interest-bearing accounts was causing her a considerable income tax problem. So, I said, "I am not a financial planner or trust officer; but, I recommend you see one soon." Then, knowing that a growth mutual fund would provide more growth and would create less taxable income, I said, "A trust officer may recommend a mutual fund." Quizzically, she looked me in the eye and said, "Dr. Recer, What is a mutual fund?" Was she a good trustee? A wonderful Mother, yes. But, a good trustee? See also, Choosing a Trustee |
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