Best Child Policy Structure

When I do a policy on a child, I explain how the parents can change ownership to the child as such a point they feel they want to - if they want to. Personally, I would not automatically "plan" to have the policy go to the kids at a certain time when you set it up(ie: utma, etc) alot can happen in 10-15-20yrs. They may not want the child to have the policy at that time, and if they do...they can pass it over. Just keep in mind on ownership transfer there may be a tax implication.

Thanks. My concern is that they want to let it bake as long as possible. Preferably, until child is 65. What would happen if Parent/Owner died prior to transferring to child. The plan is to put $3k per year in for 10 years and then let it bake. I guess the thing to do is name parent owner with another adult named contingent owner in memo section??? Then transfer ownership to child at the right time.
 
Thanks. My concern is that they want to let it bake as long as possible. Preferably, until child is 65. What would happen if Parent/Owner died prior to transferring to child. The plan is to put $3k per year in for 10 years and then let it bake. I guess the thing to do is name parent owner with another adult named contingent owner in memo section??? Then transfer ownership to child at the right time.

I would suggest putting the child as contingent owner. If it goes to another adult then there is no guarantee that they will transfer it to the child.

If there is no contingent owner then it would transfer to whomever inherits the estate.
 
I would suggest putting the child as contingent owner. If it goes to another adult then there is no guarantee that they will transfer it to the child.

If there is no contingent owner then it would transfer to whomever inherits the estate.

what would happen if they died prior to child turning 18. do you think the carrier would still transfer to contingent owner child?
 
what would happen if they died prior to child turning 18. do you think the carrier would still transfer to contingent owner child?

No. It would follow the same laws as the rest of the estate. So whomever their legal guardian ends up being would have control of the asset until the child is 18.

If the parents want complete control of how how the asset is distributed then they should put it in a trust.
 
Make dad owner.

Mom contigent owner

Make policy owned by insured if owner and contigent owner die.

Maybe your grandchildren will get a lot of money :)
 
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