by abcurry » Fri Feb 05, 2010 07:05 pm
i want to leave insurance or 401k proceeds to a minor child. what wording do i use to have the funds placed in a trust or to name a trustee to oversee the funds on behalf of the minor child?
Posted: Mon Feb 08, 2010 06:35 am Post Subject: Wording
When you designate a beneficiary, it is important that you specify the beneficiary's relationship to the insured. You need to consult your legal advisor about the effect of a designation.
Posted: Tue Feb 09, 2010 02:39 am Post Subject:
You are most likely looking for a testamentary trust, the detail of which would be outlined in your Last Will and Testament. If you do not have one, or do not have such a provision in your will, you will need to sit with your attorney and make this change.
Posted: Tue Feb 09, 2010 05:41 am Post Subject:
Hi abcurry
I'm sure your attorney will be able to guide you regarding what you should write in the trust. If you want to name a minor as beneficiary, the court will appoint a trustee or a guardian to receive the money till the kids come of age, since most plans do not transfer money directly to a minor.
When you gift the proceeds to a minor make sure you do it in a way it qualifies for annual gift tax exclusions. Consult your tax attorney for this.
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