Conference moira::parenting_v3

    
    re .9
    
    >>bank account.  Because three names weren't allowed.
    
    
    
    	NFS (Nashua Federal Savings) allows this, because we have an
    	account like that with our son's name on it...
    
    
    John
    

    re .9 and .10, Have you or anyone else out there checked the DCU
    policy?  How many signatures do they allow, and can you sign for your
    child up to a certain age?
    
    Just curious
    Lyn

    an added question to .11, as relates to .9 and .10, when you opened the
    bank accounts for your children who's SSnumber did you give to the
    bank? Your child's, yours, all of the above?
    
    Just curious....
    Lyn

>                      <<< Note 1148.12 by MCIS5::TRIPP >>>
>                         -< Who's SS number at bank? >-

>    an added question to .11, as relates to .9 and .10, when you opened the
>    bank accounts for your children who's SSnumber did you give to the
>    bank? Your child's, yours, all of the above?

	I have bank accounts at both DCU and an outside bank in my son's
	name....at DCU, you can open a separate "100"account (100 then your
	badge #) for the child and can even have money automatically deposited
	from your weekly check.....in both places, the accounts carry HIS
	social security number.....he can "earn" up to a certain amount
	of interest (forget the exact figure); if he earns more, than the
	interest is taxed at the PARENT'S tax bracket !

	as far as signatures go, he wasn't old enough to sign when the
	accounts were opened so I signed for him and then signed for
	myself as secondary, that way I can take money out of his account
	for schooling, special expenses, and when he's old enough, he'll
	be able to himself.

Copied from 1148.

         <<< NOTED::DISK$NOTES3:[NOTES$LIBRARY_3OF5]PARENTING.NOTE;1 >>>
                                 -< Parenting >-
================================================================================
Note 1148.9                  Name Change - Adoption                      9 of 13
SELL3::MACFAWN "Training to be tall and blonde"      17 lines   2-OCT-1991 12:17
                      -< Speaking of social security... >-
--------------------------------------------------------------------------------
    Four years ago I went to the social security office in Nashua and
    applied for my newborn daughter.  They then yelled at me because my
    daughter couldn't sign the application.  When I told them that I was
    signing it as her legal guardian because she was a newborn, they yelled
    at me again saying that a newborn doesn't need one.  I got one anyway.
    
    When I had Krystin 1 year ago, the hospital took care of everything,
    all I had to do was sign where necessary and they mailed them out for
    me.
    
    I've run into the same problem with my kids bank accounts.  We opened
    an account for Alyssa, but we could only put one parents name on the
    bank account.  Because three names weren't allowed.
    
    So I guess you run into problems no matter what you do.
    
    

Just "checked" this morning.

There is no problem with adding a third person on a kid's checking
account, according to the teller.  Thanks for asking the question;
I got a card to add my wife's signature to our children's account.

We've been happy with DCU for our kids' savings accounts.  Aside
from the convenience, they didn't balk at starting an account with
only $20, or accepting deposits of a dollar or less.

Clay 

    
<You guys take all the fun out of noting ;-).. Moving notes around that
    don't belong in certain topics... >  many smileys...
    
         <<< NOTED::DISK$NOTES3:[NOTES$LIBRARY_3OF5]PARENTING.NOTE;1 >>>
                                 -< Parenting >-
================================================================================
Note 1148.14                 Name Change - Adoption                     14 of 14
VMSDEV::FERLAN "CAPTAIN: Hop on the EFT express"     16 lines   4-OCT-1991 11:39
--------------------------------------------------------------------------------
    
    
    For us, we have our son's SSN#..  The acc't is made out to:
    
    	Son AND Either Wife OR Husband...
    
    
    We have always been able to put money in and also use that account
    for any check cashing business at the bank that we have, even though
    neither my wife nor I have any separate/joint accounts there other than
    the one with our son...
    
    
    
    John
    
    

    When my husband opened the bank account, he put my daughter's social
    security number and his own social security number as a secondary. 
    When I went to make a withdrawl on the account, they wouldn't let me
    because I wasn't listed on the account, Paul's was.  So when I asked
    them to give me a form so that I could withdraw on it, they said I
    couldn't because no more than 3 names were allowed on the account and
    we already had 2.  When I explained that my daughter was only 3 years
    old, she said, "I'm sorry, but that's our policy."
    
    I think we'll be cancelling out that account anyway and putting it in
    DCU.  Less hassle.
    
    

    My question is a little different, but I feel related enough to belong
    in here.
    
    Our son has been given many U.S. Savings bonds as gifts.  Many of them
    are written to him/P.O.D. and in some cases it's his Great-grandmother.
    Now I love this woman dearly, but she's nearing 90 and has several
    serious conditions which lead me to believe she may not be with us too
    many more years.  
    
    My question is how do we change the beneficiary from her to say either
    my husband or I?  And what happens if, God forbid, she dies before he's
    old enough to cash them himself, or they mature?  As well as some of
    them list the GIVER's SS#, and don't reflect AJ's SS #, how can I
    correct this?  Some of the Bonds reflect my husband (naturally it's
    because it's HIS family that gave the bonds) as the P.O.D. person, do I
    have any right to cash these in, either now or when they mature. I mean
    really I'm ONLY his Mother!!
    
    Lyn

    I openned an account at our local bank for my son when he was 8, now 
    he is 14.  I was listed as the trustee of the account until Nate is 21.  
    The rule was he was to deposit half of what ever money he received via
    allowance, birthday money ,whatever.  He was given a deposit/withdrawl
    checkbook and he was responsible for managing it, with my help.
    
    Last year he needed to withdraw $20, when I sent him in the bank to do
    the withdrawal, the teller wouldn't do the transaction without my
    consent. I thought it was great, and so did Nate.
    
    I have recently oppenned savings accounts for all three of my
    children at the DCU, with the intention to purchase CD's.  The rate of
    return is higher, and their money just tends to sit there anyway.
    
    
    Regards, 

    Those of you considering using DCU should check the rates at
    other banks.  DCU rates tend to be lower than most banks.
    
    The "proper" way to set up an account for your child is:
    
    	"<parents' name(s)> as custodian for <child's name> under
    	the <state name> Uniform Gifts to Minors Act"
    
    The child's SSN is then given for the account.  This ensures that
    the interest is reported as the child's and not the parents', and
    also it requires that the parent cosign on withdrawals.
    
    I've found that not all bank personnel understand this, but many
    do.
    
    Also, instead of CDs, consider a mutual fund.  The yields are
    greater and the risks reasonably low with a good one.  If your
    child has a lot of interest coming in, a tax-exempt fund would
    be in order.  Any interest over $1000 is taxed at the PARENTS'
    marginal (highest) tax rate!
    
    				Steve

re: 11

Ditto, Ditto, Ditto, Steve.  You spoke the exact words of our tax accountant
(former IRS auditor!).

The only thing I disagree with is "mutual funds".  I want to make sure
Juli's money is "as safe as it can be" (especially in today's banking crisis!).
I might gamble with my funds, but I'm not about to gamble with Juli's.  Also,
the CD rates are not that much higher than savings right now, so we didn't
bother to move "and tie up!" Juli's funds (although to us they are "frozen"
and "untouchable" whether in a savings account or CD).

And DCU rates "slay" me ... !! (but DCU is so convenient!!)

DCU also offers the "minor child act" account, however, few tellers know
about it.  We had to call the "headquarters numbers" and they sent us the
necessary forms.

Dottie

Re: .12

I can understand your desire for safety, but I hope you realize that by insisting
on 100% safety that you're stuck with low yields that won't keep pace with
inflationary education costs (currently 6% for state colleges, 8% for
private colleges.)

Another option for such funds is "zero-coupon treasury bonds".  These are also
backed by the US Government, have higher yields than bank CDs, aren't
susceptible to bank closures (ask the folks in Rhode Island when they'll next
be able to get their money frozen by the governor in the credit unions),
and are simple to understand.  They are not tax-exempt, though.  I decided
against these because the yields still aren't very good.

My strategy is to put my son's "college fund" in a set of high-yield
tax-exempt mutual funds with an excellent track record.  With high-yield
funds, the actual value per share can go up and down, but the total yield
can exceed the taxable equivalent of 10%.  As he gets older, I'll shift into
more stable (but lower yielding) funds.   My experience so far has been very
positive.  I have excellent liquidity - I can withdraw or move funds around
at any time, unlike with a CD.  So if some other opportunity arises (like
CD rates shooting up as they did last year), I can take advantage of it.

The worst thing you can do is to stick with a passbook savings account, unless
you're talking less than $1000 total, as the yields are so low as to be little
better than sticking the money under a mattress.

The current issue of Consumer Reports has a timely article on the subject of
your child's savings and college expenses.  It includes a chart suggesting
what you need to save each year in order to fund four years at college, based
on your child's current age.  It's an eye-opener.

				Steve

    
    Steve, why did you go with tax exempt funds?  Did your child have over
    $1000 in interest?
    
    I have Katie's money in a mutual fund for investing in small companies
    and the yield has been excellent thus far (year to date 33.54%!)
    For any long term investment like college for young children or retire-
    ment it just doesn't make sense to go the way of Banks or insurance
    companies.  They (banks and insurance companies) are in such deep
    problems now, I don't consider them safe at all, FDIC or not!
    
    Sue
    
    PS. I am not sure if you can advertise funds, but its the Janus Venture
    Fund and unfortunately (for others) it is now closed to new investors.
    But there are alot of good mutual funds out there...

    [This is a reposting of my original .15, but with the correct number
    for Vanguard.  My apologies to anyone who tried the wrong number.]
    
Re: .14
    
My son's account is not yet earning over $1000 in dividends, but will be within
a year or two.  I decided to just go for the tax-exempt now so I wouldn't have
to worry about it in a couple of years.  I know I'm getting a somewhat lower
yield than if I went with a non-exempt fund.  I'm also using this same line
of funds (Vanguard) for my "retirement savings"; the Vanguard funds are all
no-load (which means no extra costs up front or at withdrawal), and the 
overhead charged to the fund by Vanguard to run it is one of the lowest in the
industry (0.25%).  My yield has been nowhere near 33%, I admit!

I don't think there's a problem recommending national companies which deal
in mutual funds. (If there is, my co-mods will surely let me know!)  If you'd
like Vanguard to send you information on their mutual funds, call them at
1-800-662-SHIP (800-662-7447).  You can request literature at any time;
if you have detailed questions, such as on past performance data, call
between 8:30AM and 5PM Eastern time.  I have found them to be prompt,
courteous and a pleasure to deal with.

Many newspapers report the performance of mutual funds; the Boston Globe does
a good job of this, for instance.

Some more things to keep in mind; the general tax-exempt funds are only exempt
from Federal tax.  Most are still taxable at the state level.  Most larger
companies (including Vanguard) have specific funds which are tax-free in
one individual state (MA, NY, etc.), so if you live in one of those states it
may be worthwhile to look at that aspect too.  I haven't found one yet which
deals in NH-tax-exempt funds, but the NH tax (on dividends over $1200) isn't
really an issue for me now.

			Steve

re: .11, .13

.11> Those of you considering using DCU should check the rates at other
.11> banks.  DCU rates tend to be lower than most banks.

.13> The worst thing you can do is to stick with a passbook savings 
.13> account, unless you're talking less than $1000 total, as the yields 
.13> are so low as to be little better than sticking the money under a
.13  mattress.

I agree with Steve.  When I suggested DCU for savings accounts for kids, it
was for a very specific kind of account -- the kind of savings accounts that
kids start with gift money and with savings from their allowance, which exist
mainly to develop the "habit" of saving money, and which don't yet have more
than a few hundred dollars in them.  In our case, the accounts were started
with $20 worth of Christmas money; it's very, very, difficult to find any
financial institution that will even start an account with that kind of
money, and even if they do, the minimum balances and service charges not only
eat up interest, they eat up principal too.

Once an account gets to around a $1000, maybe even less, the money should be
moved to some other vehicle.

Clay

re : Note 1156.16 by POWDML::SATOW >>>

> Once an account gets to around a $1000, maybe even less, the money should be
>  moved to some other vehicle.

Clay,  I guess in principle, I'd agree with you.  However, I'm at a loss to
know what those "other vehicle"s might be !!!  I've been going to a financial
planner for the last few years to get my own finances straightened out and
while that's been good, the last time I was there, he wanted me to 'invest'
in some different stuff (great technical term, huh :-)  ) that didn't feel
comfortable to me.

how do you know what a good investment is ?? I've got a fairly sizeable amount
of money for my son's education sitting in a bank right now, only because I
have no good idea WHAT to do with it !!!!  I do know I'll be paying Dear Ole
Uncle Sam next year and probably lose money on the deal because it's just
in the bank.........:-{

Debbi J

Re: .16

Most banks will open a passbook savings account for children for a very low
minimum ($50, sometimes less) and will waive service charges.  I have one like
this for Tom at NFS in Nashua.  But if you're dealing with these sorts of
amounts, DCU is as good as any other place.

Re: .17

As for "what's a good investment?", there are many answers.  It all depends on
what your goals are, how much risk you're willing to take and how nervous you'll
get during short-term downswings.  There are numerous publications on
investing strategies - Consumer Reports has run some good articles, you can
probably find others in magazines such as Money.  I also find it interesting to
follow the financial advice columns in the newspapers, as they often point out
things that an inexperienced investor (like me) would miss.

I decided that the tax bite on taxable investments was too much to bear, so I
looked for tax-free investments.  Mutual funds are a popular way to go for
people who don't want to have to become experts in the stock market.  There
are municipal bond funds, with varying term lengths; the longer the term, the
higher the yield but also higher the risk.  There are stock funds which
can match or outpace the market in general.  There are money-market funds which
are short term but almost risk-free.  The prudent investor will spread their
money over a variety of investment types so as to not risk losing everything.

US Savings Bonds are actually a pretty good investment right now, if to be
used for education.

				Steve

Ok, time to 'fess up.  I fibbed.  I don't currently have my son's college
savings in a tax-free mutual fund, though I had definitely planned on doing
so within the next week, as the CD the funds are currently in matured yesterday.
(I do have my own retirement savings in the Vanguard mutual funds.)

I just called Vanguard to get information about various funds, and was given
information which makes me realize that I was missing an opportunity for Tom's
savings.  It is true that income from stock funds is taxable, but it's only
the actual dividends paid out which are taxable, not the "total return" based
on the growth in value of the fund.  That would be taxable at time of
redemption, but in the meantime there is no liability for that part.

One fund which I have seen often recommended in the newspaper is Vanguard's
Index 500 fund, which attempts (and has been succeeeding) to duplicate the
performance of the S&P 500.  Current yield is 3%, but the total return this
year so far has been (I think) 15%.  I've sent for the prospectus on this
fund.

If you call Vanguard or Janus or Dreyfus or any of the other large firms, they'll
send you prospectuses and other information you need to choose an investment
wisely.  Each fund has a strategy and a goal, and the prospectus will tell you
how the fund has performed in the past as well as an outline of some of the
risks.  Don't invest in anything without reading and understanding the
fund's prospectus.

				Steve

    Re: Uniform Gifts to Minors accounts
    
    While there are tax advantages to the above accounts, please keep in
    mind that when the child comes of age the funds belong to him or her. 
    That means the parents lose control of how the funds are spent.  So if
    you are saving specifically for college (and don't plan on gifting the
    money unless it is spent for education) the UG accounts have their
    drawbacks.  
    
    In my opinion, there are better ways to avoid taxes on
    education-related savings.  

    
    re: 20 
    
    So what are the better ways to avoid taxes and avoid ugm?
    
    

Re: .20

That's true.  One way to avoid the problem for educational savings is US
Savings Bonds held in the parents' names.

			Steve

    Or you can set up a trust, as I did.
    
    To do this, go to a lawyer: there are too many choices and
    gotchas to explain here.  My son's trust dissolves when he
    turns 21, by which time most of his education will probably
    have been paid for.   His is "irrevokable", as I can't get
    the money back--this is required to get the trust to pay taxes
    at a rate lower than mine: it pays taxes at its own rate as
    though it were a separate individual--there's no "bump-up"
    to the parents' rate.
    
    Setting up a trust will cost between $100 and $500, and it
    will require a trustee.  My brother is the trustee, so the
    trust doesn't have to pay a trustee fee.  The trust is investing
    in stock mutual funds, but trusts can do all sorts of investments.
    
    The expense and labor of a trust is reasonable if you're 
    putting a significant sum in.
    
    		-John Bishop

    Here's my Naive question for the day....
    
    AJ has many U.S. Savings bonds which have been gifts almost since
    birth.  Would I be wiser to cash them in now, even though the soonest
    they will mature is in 3 to 6 years, and deposit the proceeds say into
    a 6 or 12 month CD?
    
    I'm not sure what the bonds pay these days as far as interest goes, and
    with a CD I will know that in 6 or 12 months I WILL know what it will
    yeild, plus not having to wait as long for a payback.
    
    Lyn

re: Savings Bonds being  tax exempt...

My husband and I considered taking the cash Megan received at ther christening
and buying more savings bonds for her for her education, but we were told that
there is an income cap on that.  If the parents make more that $60,000/year 
jointly then the bonds will not be tax exempt.  

Now we're not raking in the bucks but we're pushing that now and Megan isn't 
even walking! So we just have it sitting in an account until we can figure out
what else to do with it.  Sounds like I should get on the phone to Vanguard!

W-