Apr 29

Since there are a lot of possible variables, here’s my situation. I’m not planning on dying, just trying to figure how much life insurance I should have and what I can do ahead of time.
Single. Live with both parents. No dependents.
10k student loans
10k ING savings
10k stocks
2k IRA
2k credit card debt
4k car in my name

So far I’ve learned on Sallie Mae.com that student loans are eligible for discharge upon death. Good reason not to pay them off when you have a nice 3% interest rate.
Now, I’d like my parents to be able to just take my car, savings/checking accounts (they have the same bank), Roth IRA, and stocks in the event of my death. How can I allow them to do that?
Which of my debts become null? And what accounts can they claim without any effort? What can I do to make things easier for them? Also, how do taxes come into effect.
I hope others may find your answers useful as well.
Sallie Mae website about loan discharge.

http://www.salliemae.com/after_graduation/manage_your_loans/borrower_responsibility/understanding/discharge.htm


9 comments so far...

  • pammie Said on April 29th, 2010 at 6:08 pm:

    Do you have a will? Everybody old enough to work, I think should have his/her own will.

  • duoak Said on April 29th, 2010 at 6:12 pm:

    You can make it easier by naming them as beneficaries of your IRA and other investments, and by making a will. You could alkso name them as joint owners of your account. If assets are in your name only, your parents would have to go to probate court to get access (with or without a will, but having a will is easier). If you are still single and have unless you wrote a will stating otherwise.

  • ryacosta89 Said on April 29th, 2010 at 6:53 pm:

    u either give it away in your will or the government takes it… and your debt is passed on to your family.

  • sugarbdp1 Said on April 29th, 2010 at 6:54 pm:

    They go to your next of kin

  • sandcatsle Said on April 29th, 2010 at 7:03 pm:

    You need a will, otherwise your estate goes through probate and there is a good possibility that all of your hard earned savings will go to the powers that be instead of your family. If you die, student loans can be discharged. If you declare bankruptcy, you still have to pay your student loans. You don’t sound like you need life insurance. You have no dependents, and your savings should cover the cost of burial.

  • DEBBIE Said on April 29th, 2010 at 7:34 pm:

    hopefully u can find a good attorney A WILL

  • dawn18417 Said on April 29th, 2010 at 7:43 pm:

    The state you live in takes half of your assets without a will.And gives your kids to whoever it wants to even if you wanted them to go somewhere else.Get a will that says you bequith your entire estate to your parents.What ever your income is multiply by 15 and that is how much life insurance you need when you have family however if your only concern is burial expenses 10 thousand should be enough.

  • Joe H Said on April 29th, 2010 at 7:50 pm:

    There’s some misinformation in some of the answers you received.

    If you die without a will, the state will determine how to divide up your estate. The state follows “common sense” guidelines. (money goes to parents, unless married, then to spouse, unless spouse passes first or simultaneously, then to your kids in equal shares)

    Usually your creditors will attempt to collect what you owe them from your estate with few exceptions as you found.

    As others said get a will and maybe a trust set up, also keep it updated when you get married or have children.

    For now name your parents as beneficiaries for all of your investment/savings account (be sure to update this when you get married also).

    As for your insurance needs, At this time it is minimal. Life insurance should be used to replace your income so that your family is not sent to the poor house if you die early. although you may wish to buy early to lock in lower rates and to insure you get coverage when you need it. (if diagnosed with say, Diabetes, before you get Life insurance, it will be much more expensive.

    There will always be some effort in claiming accounts but having a current will/trust/named beneficiary will make it easier.

    Taxes is almost too complex of an issue. you should seek out professional advise.

  • john d Said on April 29th, 2010 at 8:02 pm:

    Lets do some simple math
    Your ing savings is not earning as much as your crdit card and car payment is costing your. Take some of your ing savings and pay off both. Begin making your student loan payments as it is un likely you will die before it is retired and if you stall around on it it will just be more intrest for you to pay. You can pay intrest or earn intrest. You decide.

    As for the rest of it, get a will There are several places to get one online but they don’t pay me a commission or referal fee. So I’ll let you find your own. You don’t need a full fleged lawyer. You can get a do it your self kit or an on line service that is reasonable in price and fill out your own will. These have been tried and tested in court and hold up just fine. IF you fail to fill out a will and your parents name is not already on your assets, the probate court will eat up your assets in fees and the debts will be passed on to your family.

    As for insurance get at least 10k for funeral expenses. After that you don’t really seem to need much life insurance. What ever debt you leave behind you may want enough to cover that as well. After that its up to you. But by all means get a will. I see that every one else has offered that advise as well. So take a clue that the will is important. Yes the probate will take about half of everything. They can take more. Legal fees and such can really pile up after you die if there is any question or complication or challenges to your loot.

    There is however another option. This is not my field of expertees but here goes. Give it away before you die. The way to do this is a trust. There are many kinds of trusts and which one is for you is something you need to take up with a lawyer. You no longer “own” the assets, the trust does. YOU control the trust. upon your death the trust continues on after your death. It will continue on in what ever way you set up….including that your parents or who ever take control. If some where down the road you get married and have a family, the trust can be changed to reflect that your spouse will have control of the trust and all its assets if you like. You can make it do what ever you want. It will live forever if you like. Ben Franklin (one of the founding fathers) left 5000 to the city of boston. The stipulation is that boston can never spend the money. They can however spend the intrest. The city of boston still has the money and still benifits from the intrest. Its been over 200 years. So you see you can do a lot with a trust. You can do it for a long time.

    I don’t know about student loans, However with out some sort of life insurance on your debt, it continues on too. Your family gets that. The Probate court does not have an intrest in paying that for you, rather just pocketing what ever you can that is of value. The bills they readly pass on to your family.

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