College money for child who lost parent
August 5, 2008 5:16 AM Subscribe
A friend died leaving a young child. How best to donate money for college? Other parent possibly not trustworthy with cash? We are talking possibly only about 2-3K. College age in about 10 years.
In Massachusetts.
In Massachusetts.
If the surviving parent can't be trusted with the money, and we're only talking 2-3k, I'd set up some sort of interest-bearing, low-risk account for the money. When college time comes around for the kid, use the money to buy him/her books and a computer, or something like that. But do let the parent know now that you're doing this, so that it's not out of the blue in 10 years.
posted by lunasol at 5:33 AM on August 5, 2008
posted by lunasol at 5:33 AM on August 5, 2008
Response by poster: DIFFICULTY : We are not planning on really planning on ability of having any contact with said child.
(thanks so far!)
posted by beccaj at 5:54 AM on August 5, 2008
(thanks so far!)
posted by beccaj at 5:54 AM on August 5, 2008
If the parent knew you were doing this would he/she not take a similar action themselves and assume your covering all the bases?
posted by Science! at 5:58 AM on August 5, 2008
posted by Science! at 5:58 AM on August 5, 2008
We are not planning on really planning on ability of having any contact with said child.
Well, that's pretty much required to leave them any sum of money. The 529 plan is the best bet, but the kid is going to have to know of its existence at some point.
posted by electroboy at 6:25 AM on August 5, 2008
Well, that's pretty much required to leave them any sum of money. The 529 plan is the best bet, but the kid is going to have to know of its existence at some point.
posted by electroboy at 6:25 AM on August 5, 2008
definitely go for a 529 plan. note that you are *not* restricted to the MA plan.
you can enroll the kid in, afaik, any of the 529 plans out there.
you'll need the kid's social security number to set it up.
posted by rmd1023 at 6:35 AM on August 5, 2008
you can enroll the kid in, afaik, any of the 529 plans out there.
you'll need the kid's social security number to set it up.
posted by rmd1023 at 6:35 AM on August 5, 2008
Are there grandparents around? They can have their names on the 529 plan.
posted by Gungho at 7:22 AM on August 5, 2008
posted by Gungho at 7:22 AM on August 5, 2008
I'm pretty sure that this is what trust funds are for. They don't have to be millionaire-huge, any amount of money can be held in trust. You can stipulate exactly when the child can touch the money, and I'm pretty sure that you can forbid the parent from getting to it. Talk to a lawyer.
The 529 idea also works quite well, but you may need to wrap that up as an asset in trust as well. Talk to a lawyer. (Yes, I'm being intentionally redundant for effect.)
posted by Citrus at 7:38 AM on August 5, 2008
The 529 idea also works quite well, but you may need to wrap that up as an asset in trust as well. Talk to a lawyer. (Yes, I'm being intentionally redundant for effect.)
posted by Citrus at 7:38 AM on August 5, 2008
The community did this for my (late) brother's children. What worked for us was that the trust account was set up by a lawyer (pro bono) with the local UU church (where my brother attended) and the kids and mother were told about the trust's existence. When the kids needed money for school, they called the church and/or the lawyer. I think it was good that there was an entity for the kids to call, in addition to the individual lawyer. Just in case the lawyer moved or whatever.
Young kids who have lost their dad -- usually someone (bank, lawyer) will set up the trust for free.
posted by ClaudiaCenter at 10:01 AM on August 5, 2008
Young kids who have lost their dad -- usually someone (bank, lawyer) will set up the trust for free.
posted by ClaudiaCenter at 10:01 AM on August 5, 2008
A trust with fine details of how it should be spent?
posted by dasheekeejones at 10:47 AM on August 5, 2008
posted by dasheekeejones at 10:47 AM on August 5, 2008
This thread is closed to new comments.
posted by k8t at 5:32 AM on August 5, 2008