Purchase of T-bills
On a recent ‘ask Terry’ reply you advised to buy T-bills ONLY via Treasury Direct and NOT from a brokerage firm. What are the problems with the latter ? As you know, Treasury Direct does not allow a registration with both a co-owner AND beneficiary. Our Fidelity brokerage account is owned by our RLT and successor ownership is not the problem as with Treasury Direct.
Terry Says
Here’s why I recommend individuals — and Revocable Living Trusts — purchase T-bills DIRECTLY through the TreasuryDirect.gov website: T-Bills beat CDs – Terry Savage
First, you always want to be a direct creditor, since your brokerage account anywhere is insured up to $500,000 by SIPC.
But, and almost as importantly, many financial advisors charge you based on AUM — assets under management. And they really shouldn’t count Treasury bills (your “chicken money), since they don’t give advice on that money. But you’d be amazed that many brokers/”advisors” do get compensated on the total value of your account.
So I always recommend buying on your own through TreasuryDirect.gov since it’s so simple for an individual to manage. Of course, you can title the account in the name of your Revocable Living Trust. It’s an easy option. And since you already have a RLT, there is no need for a beneficiary. That’s the whole point of the RLT!
