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 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.