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Wills & College Funds

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I suppose this can be a bit of a personal topic but for those willing to discuss, would you mind shedding some light on what you did in regards to doing a Will and setting up a college fund for your child/children? Thank you.

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I guess I can share, though I don't know how much it will help you. I thought other people might have something more helpful to share for you, but since nobody has posted yet, here goes:

I have a will specifically because if I didn't, should something happen to me the courts would likely end up putting my son in foster care then giving him to his father. Since that would be an adverse situation, I've written a will that stipulates my parents would be his legal guardians should something happen to me, and he is the soul beneficiary for everything I have, including my life insurance policy that is provided through my job.

College funds... I've still been struggling with. I haven't really decided what I think is the best route to go about a college fund, so while I try to figure it out I've just been putting aside a monthly allowance in cash for him- locked away in a safe box. If I decide to get some kind of policy or grow-up plan for him, invest it in something, or get a savings bond, all the cash I've put away will go there. I just don't know which way I want to go, and I'll be encouraging him to do his own savings as well- as I want him to learn to be a hard worker and wisely manage his money. We'll see...

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Unless the laws and such are much different in the Us than they are here you can appoint the executor of your estate as a trustee for college and trust funds for minor children. You can manage the funds til death and then just make sure you have someone you trust appointed to watch over the funds if something should happen. That's what we did when my aunt died and my mother was appointed trustee of the grand children's money/investments and if something should happen to her before they come of age then i take over as stated in her will.

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As my children were growing up saving money for their continuing education was very difficult. As soon as there started to be a little bit of savings the car would break down or one of them would break a window, etc. Life happens! :) That didn't mean college wasn't available to my children. It was. My youngest was the only one who took advantage of our help. We also insisted she apply for loans and grants and other financial assistance. I'm a firm believer in a child helping to save for college or being responsible for some part of the cost and my daughter reinforced that belief for me. She spent two years in college and ended up on academic suspension. Hopefully, some day it will be important enough to her to finish what she started.

We don't have a will. Never got around to it. But my son does for the same reason as JudoMinja.

If I was the parents of small children today I would have a will. The laws, courts, DCFS don't always have children's best interests at heart. 25 years ago it was a little different. The closest family member/s usually got the children if both parents were deceased. In today's world sometimes that doesn't happen even with willing family.

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Thanks for your insight, guys.

I'm not very familiar with how this all works, despite my husband and I talking about the two issues, he's mostly been the one to actually handle them. We had an appointment with our financial advisor last week and setup a college fund for our daughter. One of our concerns was that because the account is for her and in her name, that she'd pull out money for reasons other than an education. We don't want this to happen but in further discussion with our FA, I'm understanding that she cannot access the acount at all, without our signatures. So that's a relief!

Yes, we're still not sure what to do about a Will. We know it's important to get done but there's a lot of aspects regarding it that we're still uncertain of. For one, we don't even know WHO would take our daughter if something were to happen to both of us. Both set of grandparents are too old to raise a little girl. The grandparents are in their mid 60's and entering their 70's.. My husband's siblings are also a bit older and have no interest in raising kids (most of them are getting closer to becoming empty-nesters). My sister is really our only option but how do you approach someone with such a big responsibilty like that??? So many unanswered questions at this time.

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We didn't use a financial adviser to set up stuff. We opened up an account for both our kids with the Utah Education Savings Plan - it's the best option for us since Florida doesn't have State Taxes, therefore, there's not much advantage to using the Florida plan. UESP is one of the best administered ESP's in the country - it is run by Vanguard - and you can use the plan in any college within the US including Ivy League schools. Yes, the money can only be used for education purposes including tuition, books, lodging, etc. If the child opts out of college, the money can be transferred to another beneficiary's education expenses. You may withdraw all the money for non-education expenses but this will incur a substantial penalty.

Note: ESPs is better as a lower priority to retirement savings. So, it is always advisable to max out your IRA's first and if you still can, then put money in ESPs. The thought is that there are other means of funding a college education (scholarships, grants, loans) including working for it, but there's not many options to fund a retirement - you surely don't want to work for it!

As far as wills go, yes, it is an important consideration in case both parents pass away before the child comes of age. Properites, life insurance, etc. etc. need to be provided for in a will pertaining transfers to underage children. This is better dealt with a family attorney who is familiar with any contingencies. But yes, it is best if you can have a serious discussion with who you want to choose as your children's guardian if the unthinkable happens to make sure they are on board. Especially if you want the children to be raised in the Church and the guardian that can take care of them are not active members of that Church, it can be a little dicey...

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Anatess, thank you for sharing that. Yes apart of our concern was also that if she chose not to go to college, that the money would go to waste but fortunately, it can be transferred to the next child but can also be used for other things (such as a car payment etc) if DH and I sign off.

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I too have been struggling with the WHO of a will. We have many options but I don't feel comfortable with any of them. If finances were taken out of the equation, because we had life insurance, that would open the field up a lot more. Part of the problem is I keep thinking 'will they raise them the way I want them raises?' The answer is always no because they aren't me. I want them raised in the church. Ok... active members of the church in both of our families leaves... my 19 year old brother. There are a few relatives that have kids of similar ages, but I seriously question if they'll still be married in the next few years. The list and excuses goes on. Ok I'm ranting.

Do you have life insurance? That's my next thing I need to look into, well after dental insurance. Things to do, things to do.

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I'm glad that you made sure it could be transferred because that was going to be my first comment. lol Everything we have/are saving is in a general earmark way "mission" "education". It's not toward any specific child, those who want to take advantage of it will have access to it through us. It is not their money, it's ours and we are saving it to help them with specific life events.

We don't have a will. We do have insurance policies and a person has to be named to take care of things should we both die. We named our kids to get the money but also then had to name someone to be executor if they are under 18. I may be naive but I'm assuming because we don't have a will they would turn the kids over to the family that has been named executor.... we obviously already put a lot of trust in that person and have "approved" them to look out for the kids futures.

As for how you bring up the topic my sister is the one named. I just called her up one day and said "I have a really big question to ask you" I explained what papers we were filling out and why we wanted to list her. I let her know that I didn't expect her to take in all our kids (she was single at the time and we had 4 kids lol) but that I trusted her to make the hard decisions that would get the kids taken care of and still keep them close. She knows how we are raising them and I trust she would respect our wishes. Then I just asked "Is that ok if we put you down in that role?" It does seem weird to just call up and ask that kind of thing but it strangely casual. lol

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I'm doing a college fund for now for my kids. Everytime there is any change left over in the house from people's pockets, laundry, or left on the counter, it goes in the bank. Also, family gives the kids a little money as well as toys on holidays, to avoid having too many toys to keep. Right now I have about a thousand per kid, and they're still really little. When I get a call back from the job I'm trying for, I will budget more toward college and life insurance.

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