IRA Designations for Minors, A potential trap.

Do not fill out those IRA designations without some thought! If you are a single parent of a minor child and name your child as the beneficiary of your qualified plan (IRA, 401k, 403B, etc), at your death the financial institution managing your plan will likely require the child's financial guardian to execute certain elections that pertain to qualified plans. This means incurring an unnecessary expense in petitioning the court to appoint a financial guardian (or "Guardian of the Estate"), which could be a bank or an individual that you would not have selected. Instead, form an IRA Trust...an option that every qualified plan must give you since 2006. This way you select the person or bank that manages your child's IRA and, as a bonus, the IRA is protected from your child's creditors, spouse, and you get to select the age your child gains control over the funds.