by rpowell » Fri Apr 16, 2010 07:13 pm
If I die before my granddaughter turns 18 how do I assure that the money from my insurance policy is safe for her? I don't want anyone, her mother, etc., to be able to touch it until she turns 18, and then I want only her to be able to touch it.
Posted: Fri Apr 16, 2010 08:24 pm Post Subject:
Are you referring to life insurance or car insurance money? I ask because you placed this in the auto insurance forum.
Could you clarify?
InsTeacher 8)
Posted: Sun Apr 18, 2010 02:24 am Post Subject:
You name your granddaughter the beneficiary of the policy, regardless of age, and you use a will to indicate who should be the adult responsible for managing the money for your granddaughter until she becomes an adult.
Or, you transfer ownership of your life insurance to an Irrevocable Life Insurance Trust, and make your granddaughter the beneficiary of the trust. The trustee will be responsible for receiving and managing the money until the time specified in the trust document for your granddaughter to receive the proceeds. This is probably a better alternative than the one in the first paragraph, because it also removes the value of the life insurance from your estate.
And remember, 2010 is the perfect year in which to die. No estate taxes for any of those who check out before 12:01 am on 01-01-2011.
Posted: Tue Apr 20, 2010 02:32 am Post Subject:
Good advice Max. It's important to remember the old and (seriously) worn adage that "people don't plan to fail, people fail to plan."
It's all in the planning. Lack of planning means that a court will normally decide what's best for your kids and your money, and state law takes over. Your wishes go "poof" and the law of the land rules. If ya die without planning at all, state and federal law takes over the distribution of your assets.
Remember that estate taxation is kind of "voluntary" in nature. All in the planning.
InsTeacher 8)
Posted: Tue Apr 20, 2010 06:13 am Post Subject:
Concerning "estate taxes" . . .
Now that Obamacare is "behind us" (bend over and get ready), the latest "codespeak" from Washington DC is . . . Obama will let the Bush tax breaks for the wealthiest 2% of Americans expire at the end of the year.
Meaning: Estate tax is coming back at the 2001 rate: 50%+ and only $1,000,000 exemption.
One reporter, who apparently has no idea what the numbers actually are, said, "Even after that, the tax rates will not be higher than when Ronald Reagan took office." In those years, the income tax rate for the top tier of taxpayers was 50%, too. After TRA 1986, at least the top rate was reduced to 39.6%.
Unfortunately, if the estate tax exemption returns to $1,000,000 (where it would have been by this time according to the formula in 2001), more than just the top 2% will be exposed to it.
Unless they also take away the last line of income tax defense most Americans still have -- their mortgage interest deduction. When that happens (and it probably will in order to help finance Obamacare), the value of real estate will drop by 50% again.
All part of the socialist agenda and Robin Hood mindset.
Get those joint life applications lined up, fellas! 2011 will be a very good year for estate planning life insurance sales.
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