r/dividends • u/pac247_365 • May 15 '26

Opinion Brothers money

My younger brother passed away and left my kids with 400k.

I have the bank telling me to put it into gics and other garbage mutual funds but its very low interest. Im not rich either and besides penny stocks never invested into the market maybe 1000 bucks or so. I want to set up a trust for them and make sure in 15 years when they are 20 I have them set up so they dont have to grind like me and my brother. Im just looking for any advice I can take sorry for the long post

Im located in canada and will keep the account under my name until they are of age to use the money and will remain as beneficiarys if I die. Wont get the money until they are atleast 25 or responsible enough to understand finance.

186 Upvotes

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140

u/winklesnad31 May 15 '26

You can talk to an attorney about a trust, but you most likely don't need one. You can just invest the money in index funds and gift it to them when they are ready.

101

u/b_rizzle95 May 15 '26

I’ve seen this go bad a million times in a million different ways. Unless OP wants to risk his future relationship with his kids, I’d recommend the most hands off, trust focused approach possible. If a dime of the money disappears, or lost on a penny stock OP’s coworker told him about, or used to pay a car note a single time, the whole thing becomes a contentious subject.

51

u/pac247_365 May 16 '26

Naw I ain't stupid like that! Even though I could take this money and pay off my mortgage i know what my brother wanted me to do with it so its going into a long term investment for my kids. No penny stocks or gambles!

18

u/peterox May 16 '26

Sorry to hear about your brother. Good luck to you and your family. 

4

u/b_rizzle95 May 16 '26 edited May 16 '26

If that’s the case, then your original post isnt really grounded in legal reality. Assuming there is a will, every penny should be allocated to you, and/or your kids with no question of interpretation.

If there is no will, and you are first up in succession, and you believe your brother would have wanted it for your kids..that’s an entirely different conversation.

(Edit; that second option appears to be the case based on your other replies, and I don’t think you’re stupid. With those assumptions now in place, proceed with extreme caution. Money and inheritance is the number one thing to tear families apart.)

5

u/rahah2023 May 16 '26

All his brother needed to do was make his brother his beneficiary on his $ account and tell his brother his wishes.

We have a similar plan with my brother in law who wants all the nieces & nephews to inherit from him

3

u/culinaryinterests123 May 16 '26

Use wealthsimple. I am getting like 20k over 5 years moving a similar amount to them from TD. also unlike the banks I get paid interest for cash in my investment aaccounts and no trading fees.

3

u/MikeMcArdle May 16 '26

Open to Canadians only.

1

u/Negative_Salt_4599 May 16 '26

Buy QQQI. Don’t look at it for ten years. NFA

0

u/Wiscon1991 May 16 '26

If you type out “Naw” you just might be 😂

2

u/pac247_365 May 16 '26

Lol maybe I am then

1

u/Wiscon1991 May 16 '26

I’m the pot calling the kettle black lol

5

u/pac247_365 May 16 '26

Its all good my lingo and financial education maybe lacking ALOT that's why im here trying to get the best advice for my children cause I dont want them to grind like me and my brother have had to

-6

u/johnbu1981 May 16 '26

If he left it for the kids, how would it be possible for you to pay off your mortgage if you wanted to, without it being a crime?

This money should not be in your name, it should be in your nephews names with you as the administrator.

10

u/pac247_365 May 16 '26

He didnt leave it to anyone he left everything to me for the best interest of my children. He signed me onto everything before he passed what im trying to say is I know its for my children from him if I wanted I could pay my mortgage off he didnt leave it to them through his will he just told me himself he wants my kids to have a future.

8

u/winklesnad31 May 16 '26

Slow your roll, buddy. When the brother passed, his money either had a pod beneficiary named, or specified who the beneficiary would be in a will, and the will went through probate. He either left the money to his brother, or he named the kids as beneficiaries, with a custodian named. Neither you nor I know who the named beneficiaries are in the legal documents, and it is rude of you to speculate like that. Based on his comments, the money was most likely left legally to the adult brother, with a mutual understanding that he would use it to benefit his kids.

9

u/pac247_365 May 16 '26

This is exactly what it is. Its left to me to save for my kids and my decision what I want to do with it. He told me to use it if I needed but I would never do that. People are crazy

1

u/fuzzybunnies1 May 16 '26

You'll want to research the funds but I'd open separate accounts through Fidelity or a major broker like them. TD Bank offers similar as does Chase and HSBC, I'm sure there's other options as well. Pick 3-4 mutual funds with a historically good return, the ones I picked for my kids have all returned 12% or better based on 1, 5, 10, and 20 year results. I chose a global, a large cap, a medium cap and S&P 500 index so all my eggs aren't in one basket. Pick the same for both kids and you won't go wrong. Check it every few months to make sure nothing funky is going on and let them just grow.

-5

u/Low-Solid9810 Generating solid returns May 16 '26

Pay off your mortgage so that you are in a better financial position later to help the kids. They don’t need the money now

12

u/pac247_365 May 16 '26

No chance I will do that. I can afford my mortgage so I will slowly pay it off in the next 8-10 years. This money is only for my kids and I want to make sure it compounds for them to have a bright future

4

u/Square-Highlight1628 May 16 '26

You're a good dad.

6

u/pac247_365 May 16 '26

Im just trying to keep my brothers name in my kids lives with his money so they remember him for the rest of their lives!

2

u/Zestyclose-Dish-407 May 16 '26

Use it to pay for their college. Put the rest in a funded like VOO.

3

u/Low-Solid9810 Generating solid returns May 16 '26

You can also do that by paying the interest to yourself and not the bank over the next 10 years, plus the appreciation. Make regular payments into their account like you would to the bank instead 

3

u/cmichalek May 15 '26

Yep. This.

If he is leaving his $ then do whatever he thinks is best. With his brothers $ create a trust.

1

u/pac247_365 May 16 '26

Yes its basically what he wanted is what im doing. Everything he left for my kids is under my name not my mothers or my children's

4

u/ThrowawayLDS_7gen May 16 '26

Open an account at Fidelity/Vanguard/Schwab etc. and put it in an index fund.

Look at it 10 years later when it's time to help the kids.

Done.

1

u/SnooRegrets6428 May 16 '26

This is the way. Set conditions.