Setting up a trust account

[cruizer2]

What is the name of your state (only U.S. law)? NY

My children each received a check from my mother's estate. The check is supposed to be put into a trust account until they turn 21. I am in charge of their money. If I were to put it into a CD at a bank and it matures for example in 3 months, can I close the CD account and transfer it to another bank with a higher interest rate, or once I set up an account in a certain bank it has to stay there until they turn 21? Also when they do turn 21 which one of the children does in 5 months do I have to show any proof of their age? I'm not sure how this whole trust thing works.

 

[anteater]

I suspect that New York law requires a bit more than the estate adminstrator cutting a check in the childrens''names and letting you take care of the details afterwards. But, if what is done is done..

The easiest way is to set up an UTMA account with you as custodian. Yes, you can move the funds from one financial institution to another as long as you keep the accounts as UTMA accounts.

Check with the financial institutions when you set up the accounts. States (and even financial institutions) seem to vary in what is required to change the account to the child's name only when the child reaches 21.

 

[Dandy Don]

Talk to the trust department of a bank or a certified financial advisor about the best way to invest. CD is only one option, but it ties up the money. A better alternative may be a money market fund or variable annuity that gains interest but the money can be more easily withdrawn at the right time in the future.

 

[cruizer2]

Thanks for the information. Yes, my lawyer handed me checks already each in the amount of $25,000 for each of the minors with my name on it in trust for them.

 

[curb1]

DandyDon,
You said, "A better alternative may be a money market fund or variable annuity that gains interest but the money can be more easily withdrawn at the right time in the future."

I can understand the suggestion of a money market fund for easy access, but I don't understand your suggestion of a variable annuity. Variable annuities are very rigid for withdrawals and usually have significant penalties involved. Also, there is almost always a very high initial commission involved.