| setting up a trust fund for minors with life insurance money?

setting up a trust fund for minors with life insurance money?

emeraldsnewlife asked:


my father has drawn up a will and he is leaving me as his executive to his estate. he has three other children right now that are all under the age of 13. (god forbid) but if something would happen to my father tomarrow how would i go about setting up trusts for my siblings?

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Comments

2 Responses to “setting up a trust fund for minors with life insurance money?”

  1. mbrcatz17 on November 6th, 2011 3:01 am

    You can go to your local bank, that’s the EASIEST (but not, perhaps, the most financially savy) way to do it.

  2. Suzanne on November 7th, 2011 1:48 pm

    There’s one detail you didn’t mention: who is the beneficiary of his life insurance? If all four of you are beneficiaries, you’ll receive 1/4th of the money and the other 3/4’s of the money will stay with the insurer until the kids turn 18. Some states permit a small amount of money to be paid to a parent or guardian on the children’s behalf (in my state, no more than $5k per year). To get at the full amount, someone would have to be named guardian of each minor’s property. (This is not the same as being the guardian of the minor’s person — it’s a special court appointment. A parent does not have automatic guardianship rights to a minor’s property).

    So if the children are listed as beneficiaries, you should get him to fix that. The beneficiary designation can be changed, according to language that’s acceptable in that state. (Usually something like “25% to Jane Doe [you], 75% to Jane Doe for the sole benefit of minors, Edward, Susan and Sally Doe.” There should be further clarification of your duties in the will.)

    Trust funds are quite easy to set up. If it’s a huge amount of money, I’d suggest an estate attorney or estate planner.