WILL AND ESTATE PLANNING – WILL DO’S AND DON’TS

Don’ts

Do not Designate a minor (child or otherwise) as the beneficiary of any life insurance policy, retirement plan, IRA, etc.

  • By doing so, money will end up in a sequestered bank account, earning (currently) 1.5 percent interest.
  • There are no withdrawals from the account without court approval.
  • When the minor attains 18 years of age s/he gets 100 percent of the money.

Do not die intestate – without a will

  • Assets to which a minor is entitled will be held as detailed above
  • No ability to appoint a guardian for a minor child

Do not leave minor children without providing medical authorization form

Do’s

Do designate a custodial account or trust created by you (or by your will) for the benefit of the minor as the beneficiary of life insurance policies, retirement plans, IRAs, etc.

  • For custodial account to age 21, use this language: [Custodian’s name] as Custodian for [Name of Minor] under the Pennsylvania Uniform Transfers to Minors Act.
  • For custodial account to age 25, use this language: [Custodian’s name] as Custodian for [Name of Minor] until 25 years of age under the Pennsylvania Uniform Transfers to Minors Act.
  • Custodial accounts allow investment of funds in stocks, bonds, and mutual funds and allows custodian to use funds for the benefit of the children without having to run to court.
  • For a trust, it will depend upon the type of trust and your advisor will assist you.
  • Trusts can run to any age or for a child’s lifetime.
Categories: Wills and Estates