by gregmarthaler » Sat Feb 21, 2009 08:55 pm
Scenario: A husband wants to take out a $2 million policy on himself and name his two daughters, ages 15 and 10 as beneficiaries. He doesn't want his wife, the girl's mother, to have control of the money, so he intends to name an "administrator", possibly his sister, to dispense the funds so the mother is not in control. Is this possible? Does the mother have any rights?
Posted: Sun Feb 22, 2009 11:28 am Post Subject:
Sure it is done
Posted: Sun Feb 22, 2009 12:14 pm Post Subject:
Is this possible? Does the mother have any rights?
yes it is surely possible.In insurance terminology we call this 'administrator' what you are referring to as 'Appointee'.
So surely any person who is above 18 years can act as 'Appointee' for those who are minors ( in this case those two girls aged 15 and 10 yrs )
Mother won't have any rights on the money.(alimony issue is separate topic) :arrow: :arrow:
Posted: Tue Feb 24, 2009 11:36 am Post Subject:
OP you can put anyone you trust as the administrator of the plan but if the mother is going to look after the kids after your demise then its advisable to name her as the guardian in the plan. Why do you want to exclude her from the policy? Are you sure that the aunt wouldn't deprive the kids of their dues in the future? If you want you can also put the money in a trust?
Putting the money in a trust is a very good option when the beneficiaries are young. You can also make an arrangement that you would continue to receive allowances from the policy benefits till they attain the age.
Posted: Tue Feb 24, 2009 02:11 pm Post Subject:
The law currently allows only $13,000 per year to be gifted to someone. The aunt cannot "gift" $2 million without serious tax consequences (to the tune of $800,000-1,000,000). You would need to look into setting up a trust that can pay out proceeds at different intervals to the kids.
Posted: Tue Feb 24, 2009 06:56 pm Post Subject:
The wife would not need to be involved if you did not want her to. Usually though that is the best person to administer the money. I would look into an atty and see if there is a way to leave the money in trust without anyone being able to take the money out besides the children. I also would not leave that kind of money in their hands as soon as they turned 18..distribution of the money through the years is a much wiser decision.
Posted: Tue Feb 24, 2009 09:18 pm Post Subject:
yeh!! trust could be a good option.surely you can try that .consult with the attorney.(appoint two trustees as in the case your sister) then i won't find any tax issue as such. :wink:
Posted: Wed Feb 25, 2009 10:16 am Post Subject:
I also would not leave that kind of money in their hands as soon as they turned 18..distribution of the money through the years is a much wiser decision.
I guess my daughters would still need an adviser when they turn 18. I just don't want them to worry about money management at an young age. They should first understand the value of money before they'd even learn about the investment types.
Posted: Wed Feb 25, 2009 02:48 pm Post Subject:
I guess my daughters would still need an adviser when they turn 18. I just don't want them to worry about money management at an young age. They should first understand the value of money before they'd even learn about the investment types.
You can set up a trust to distribute the money at intervals. EX: $10,000 at age 18, $100,000 at age 21, $250k at age 25, $500k at age 30, etc.
Posted: Fri Feb 27, 2009 05:02 am Post Subject:
dgoldenz is right on the money with this one... You can even set rules i.e. if they go to college they can have a larger amount vs. if they took a career right out of high school and you would want them to have a smaller amount but in closer timed disbursements, etc... Definitely set up a trust. So many people make the mistake of either having minors as beneficiaries with no trust or leaving it to a relative to take care of the minors... bad, bad move! You can leave a certain amount to raise the children and the rest in a trust for them for when they are adults... so many options but making the one that is right for the particular family situation is key.
Posted: Fri Feb 27, 2009 12:06 pm Post Subject:
You can set up a trust to distribute the money at intervals. EX: $10,000 at age 18, $100,000 at age 21, $250k at age 25, $500k at age 30, etc.
hey!! dgoldenz has offered the perfect solution for this type of problem, surely it is worth to consider the option of the trust and the distribution of the money at different time interval. surely nice advice.thanks once again. :wink:
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