Generally I avoid posting on weekends, but I wasn’t sure how long this WaPo article was going to last.
Jack Kent Cooke’s daughter is suing her trust fund.
Jack Kent Cooke, for those who don’t know, was the late, some would say great, owner of the Washington Redskins. (Whom I only ever cheer for when they play the even more hated Dallas Cowboys. What can I say? I grew up in Philly. I’ll always hate America’s Team. Says who?) At the time of his death, his finances were poorly structured and put the ownership of the team into turmoil, allowing Dan Snyder to takeover.
I think it’s rather sad that Mr. Cooke did what he could to care for his daughter’s future, but it had unintended consequences. Young Miss Cooke’s trust fund means that she does not qualify for financial aid. $50K a year in annual income is quite a lot. Sheeit. That’s more than I used to make at my last job. But if you’re trying to pay taxes, full tuition, and live at school at the same time, you’re going to have a problem. I think it’s rather unfortunate that the executors of the trust are strictly reading the trust and will not allow disbursements for tuition.
I’m sure people reading this will think Young Miss Cooke is spoiled and ridiculous for going to school full-time instead of part-time or to a cheaper school, etc. But I think I got a lot of the full-time school experience and I don’t think I ever could have focused on school as a part-time student, given how much work-study was a distraction for me already.
It’s essential when you do your estate planning that you plan for stuff like this. I don’t think your good intentions will always get lost, but I certainly don’t think the late Mr. Cooke intended for his daughter to be denied a college education from the executors of her trust fund. The best way to have your intentions known is to state them clearly when you plan it out. If you have a will, make sure it says what you want it to say.
Don’t even ask me what I think happened to the $25K she received annually till she turned 16.
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As usual this lawsuit is greed dressed up as a “necessity”. She just wants a huge lump sum to blow, rather than a generous fixed income which the trust imposes (apparently for very good reason).
If she really needed a bit more cashflow for the few years needed to complete her degree, she’d have absolutely NO trouble borrowing an extra $20K or so each year from a reputable bank. By the time she finished college and got a job (she IS intending to work? else why waste college resources on her getting a degree) she’d owe, say, $60K. The interest on this amount of debt would be less than 10% of her annual trust fund income, so she could easily pay it off in a couple of years just using her trust fund income, let alone from her own work.
Like I said before – she just wants a couple of mil up front to “blow” on a Paris Hilton lifestyle.
This is why if I ever end up in a position to be able to leave an estate to my heirs I’ll definitely try to ensure they only get a portion of the trust fund earnings each year and can’t blow the entire capital. I see no reason why my grand-kids or great-grandkids should end up with nothing if my kids turn out to be spendthrifts.
Delighted to hear you know full well the rules for supporting certain football teams from the Philadelphia area.
As for the article, I agree that it’s really an unfortunate situation that has arisen, and we likely do not know the full story, but I would support disbursement of the trust fund for tuition. I am also rather surprised at a university actually refusing admittance for owing too much debt. At the large state-based university I currently attend (which shall remain nameless,) I’m sure they would welcome a chance to earn more interest on student loans, especially with someone in her situation who will have the money to pay it back at some point.
My (private) college also refused to allow students to return if they had no arrangements for payment. I think that’s pretty standard. (I could be mistaken, but I didn’t think that the schools collected interest on student loans, per the comment above–I thought that was reserved to the lender.)
It doesn’t seem to me that she wants to be Paris Hilton–she just wants to go to school. I actually did some quick research: a year of tuition and board at Southern Methodist costs $36,0000. Now consider that the $50,000 disbursement is taxed–subtracting a straight-up 20% brings her yearly cashflow to $40,000. I can see being irritated that with a $6 million trust fund, you can only spend like $330/month on all of your extracurricular costs: books, car, clothes, pizza, beer, et cetera.
What ever happened to working for money?
I don’t know! I’m still working for money!