Category Archives: Children

Ask Linda: Which type of life insurance should we buy?

Dear Linda, My husband and I need life insurance. Should we purchase a Term Life or Whole Life policy to protect our young children? Please explain the difference. Underinsured Uma Dear Uma, The purpose of life insurance is to protect those who are dependent on your income in the event of your death. A dependent can be a spouse or a young child, but it can also be a sibling or a parent whom you help financially. While there areRead More

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Why You Need to Ask Your Parents: “What’s your estate plan?”

Do you have any idea what your parents’ estate plan is? Do you know if they even have one? Unfortunately, when a parent passes away, you as their child most likely have an obligation to close their estate and finalize their financials. Below is a list of questions you should go to your parents with and have them answer. Start having these conversations now to understand the role you will play in finalizing their estate. 1. Do you have anRead More

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529 Plan Rules Have Changed

They are still the best tool in your toolbox for college planning, but there have been some changes. Here is a quick re-cap. What are 529 plans? They are investment vehicles that are named after the Internal Revenue Code that created them. They have helped many of our clients pay for college for their children as they offer tax advantages when used for qualified education expenses at eligible educational institutions. What tax advantages do they offer? When used appropriately, theRead More

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Allowances for Children

Age 5 is a common age when parents start thinking about issuing an allowance to children.   The goal with an allowance is to teach children about personal finance and delayed gratification.  Children who practice delayed gratification tend to be more successful in life.  Thankfully, this is a skill that can be acquired with practice. You may choose to tie the allowance to chores, or not.  There are two schools of thought on the topic, which you can read about here.  Personally, IRead More

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Personal Finance For Children

When it is relevant for a client, PWR financial plans include a section on personal finance for children.  We compile information from a few sources including Money as You Grow. Here are some age appropriate activities I started doing with my 3 1/2 year old. 1)  Identify what costs money versus what is free.  For example, we pay money when we go to the local pool.  We don’t pay money when we go to the library, park or the beach.  Those are free activities. 2)  Explain thatRead More

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With this next post, I wanted to share an issue I have seen a couple times within the last few months. Parents have called asking how to postpone their child from receiving a UTMA account at age 18. The answer is, you cannot postpone the inevitable. Minor children cannot legally hold mutual funds, stocks, bonds and life insurance policies. If parents want to transfer these to their children, they have the option to set up a UTMA (or UGMA) accountRead More

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