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Oct 10 2011 12:00AM


I’m a 40-year-old female with a 7-year-old child. I am in the process of rebuilding my credit, so my financial situation is not at its best at the moment. I have a decent job. I make $72,000 and have a 401(k) plan totaling around $40,000. I am interested in setting up an estate/trust in the event of my death to provide financial security for my son. What is the best way to get started in setting up an estate/trust for him?


“There are a few directives you must have in place for yourself and, by extension, your son,” said FPA member Gary Lofgren, CFP®. “The following items are necessary to make sure your wishes are carried out: Will, Health Care Proxy, Living Will (if you choose), Durable Power of Attorney. 

“Since your son is a minor, and a minor cannot own investment assets directly, you will need to have a custodial account or trust to hold the assets for your son. It may be a trust or account established through your will or created now. I would seek the advice of a good estate planning attorney to make sure these legal documents are done correctly.

“In addition, you should inquire about life insurance protection so your son will be left with sufficient assets to provide for his financial security. A Level Term policy may work best for you at this point.

“Lastly, check the beneficiary designation on your 401(k). Again, a minor cannot own investment assets, so make sure the plan designates someone (a custodian that will care for him) or something (a trust set up for his benefit) to receive your account assets.”

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