Tagged: financial planning hawaii
Give the Gift of a Lifetime
Your family means the world to you. You want your children and grandchildren to be
financially protected, so they have the opportunity to enjoy life, live
comfortably and worry less.
As a fiduciary, financial advisor, I’ve helped clients’ open traditional
brokerage accounts in their own names, and we’ve earmarked the money for their
child (or grandchild). This lets my clients’ access their money while their
child is still a minor and keep control of it after their child reaches
adulthood. Then, when they feel their adult child is ready for it, they can
transfer the account to an account in their child’s name. Or they could make
their child the beneficiary of the account if they die or become incapacitated.
With greater adult control comes higher taxes, though. They are taxed on any
earnings at their current tax rate, rather than at your child’s. They will also
need to keep in mind gift tax rules when deciding to turn over the account
funds to their child, meaning it may not make sense to transfer all of the
account’s assets at once.
Life Insurance on a Child?
After 22 years in this industry, I have heard the many pros and cons
on buying a life policy on kids. I sincerely do not have a ‘horse in the
race’. As a fiduciary, I am an investment advisor, but I do have extensive
experience with insurance planning, as well. Without question, I am always
going to do what is in my client’s best interests. And like every other
financial product out there, it all depends on your unique circumstances. I
would tell parents, first, assess your household budget. Then, take a strong,
objective look at your own life insurance needs before buying a policy for your
kids. Because, in general, your own life insurance is more important than your
child’s. But if you’ve got it covered (human life value
‘covered’, that is), then there are some real benefits to child life insurance
policies. Advantages such as, guaranteed insurability, and a cash value life
policy acting as a supplemental savings vehicle for your child. And
lastly, which we hope and pray, we will never need, is to cover costs if the
worst were to happen.
On a positive note, you can help your children or grandchildren preserve
their ‘insurability’ by putting life insurance in place while they are young.
When we are younger, many of us think we’re invincible. Take it from me (after
a life-altering spinal cord injury at age 39) we are not! Whatever route you
decide to take to give your children or grandchildren an early start down the
path of financial security, either financial solution will almost certainly be
better than not doing anything at all. Whether it is a traditional brokerage
account, or a cash value life insurance policy, it opens up opportunities for
helping pay for college, buying a new home or supplementing their retirement
down the road. In my estimation, that’s a gift of a lifetime. Email me at garrett.wheeler@securitiesamerica.com
for a free PDF resource brochure from Securian called, Gift of a
Lifetime. Aloha! -GW
SEA Financial Hawaii does not provide legal or tax advice. The information
herein is general and educational in nature and should not be considered legal
or tax advice. Tax laws and regulations are complex and subject to change,
which can materially impact investment results. SEA Financial Hawaii cannot
guarantee that the information herein is accurate, complete, or timely. SEA
Financial Hawaii makes no warranties with regard to such information or results
obtained by its use and disclaims any liability arising out of your use of, or
any tax position taken in reliance on, such information. Consult an attorney or
tax professional regarding your specific situation.