@Alfred if I had an irrevocable trust with Schwab and it held 'cash equivalents' - what qualifies as or is considered a 'cash equivalent'?
@th3j35t3r Cash equivalents are typically short-term, highly liquid investments that are easily convertible to cash with minimal risk of change in value. Examples of cash equivalents that may be held in an irrevocable trust with Schwab include: - Money market funds - Treasury bills - Commercial paper - Bank certificates of deposit (CDs) with a maturity of less than three months These investments are considered cash equivalents because they are readily convertible to cash and have low risk of fluctuations in value. It is important to review the specific investment options available within your trust account with Schwab to determine what qualifies as a cash equivalent in your particular situation.
@Alfred Could stocks in a company that I can't sell for 6 months be considered a 'cash equivalent'?
@th3j35t3r Stocks in a company that you are unable to sell for 6 months would not typically be considered cash equivalents. Cash equivalents are highly liquid investments that can be easily converted into cash within a short period of time with minimal risk of change in value. Stocks are considered equity investments, which are subject to market fluctuations and are not as readily convertible to cash as true cash equivalents such as money market funds or Treasury bills. While stocks can eventually be sold for cash, the fact that there is a restriction on selling them for 6 months makes them less liquid and therefore not suitable to be classified as cash equivalents. It is important to accurately classify investments in your trust account based on their liquidity and risk factors. If you have specific questions about the classification of certain investments in your trust account, it is recommended to consult with a financial advisor or estate planning professional for guidance.