I was listening to the talk show on 1170 AM and the financial planner was suggesting not to have kids as primary or even contingent benefeciaries on retirement plans and insurance plans?
If you are married, federal law says your spouse is automatically the beneficiary of your 401k or other pension plan – period.
If your children are your beneficiaries, and they are minors, consider this carefully. In the event of your death and the primary beneficiary, most plans will not transfer money directly to a minor. A court will have to appoint a trustee or guardian to receive the money – and that could take some time.
My questions to you all are:
1. Do you have benefeciaries on your plans?
2. Have you updated the beneficiaries after the birth of a child in your family?
3. Do you have kids as beneficiaries and how is the percentage divided among them?
4. Has anyone opened a Trust and choosing a trustee (person or institution) now, and naming your children’s trust as your beneficiary. This way the money can be transferred, and invested, with less delay.
1) Yes we have beneficiaries on our plans…. each other, after that it is one of our family members.
2) No, we did not update benficiaries as we did not want child to be a beneficiary
3) No kid as beneficiary
4) Yes we have a trust that owns everything. This way we avoid probate
Intrestingly enough we didi all this after 09/11 attacks.
You have to have beneficiaries in your 401K/IRA plans – period.
If you don’t it does go automatically to your spouse but then it has to go through the court for some documents (per my understanding). If you have the spouse as beneficiary – you do not need to go thru the court.
Also if you want any other ones to be the primary other than your spouse – you need to get notarized permission from your spouse.
For secondary beneficiary – you can have your trusted relative or anyone (even from India). However it will become complicated if the secondary beneficiary you designate is residing in India and does not get visa of US to come to collect the money…
@Vaishali, who did you make the trust from?
@Vaishali – Did you guys move all the assets in the trust? In financial terms did you fund the trust?
Yes we have moved all the assets to the trust.
The best way to do this is through is if your company provdes a legal plan/insurance ……..similar to health plan.
Subscribe to that plan and then go to an In-network attorney of that plan.
We went to a guy from Walnut Creek.
His name is David Nearon. He also has a small office in Palo Alto but he is not there often.
This way your out of pocket cost will be minimum.
Before we had Param we just had a will and another documetI forget what it is called but it nomitaes who will be able to make end of life decsions for you e.g. if you are in a car crash and who decides if you stay or go etc.
All that was free.
When we did the trust it was about $150/200 dollars.
I do not remember.
@Vaishali – the other document you are refering to – was it Living Revocable Trust with incapacity clause?
Suze Orman’s website (www.suzeorman.com) also has Will & Trust Kit for a fee.
Another important factor to consider is the titling of the asset.