An HSA gives you more flexibility and control over your health care costs. Use pre-tax dollars to pay for future medical expenses. You will be able to deduct your contributions to your HSA, and the account earnings will accumulate on a tax-deferred basis. Best of all, distributions from your HSA are tax-free if they are used for qualified medical expenses.
To open an HSA you must select a high-deductible health plan. The major advantage of a high-deductible plan is lower premiums.
Unlike contributions to a flexible spending account, the balance of your HSA at the end of the year is carried over to the next year. So you're not placed in a position of having to "use it or lose it" each year.
Contributions and plan deductible limits change frequently so consult your tax professional regarding your individual circumstances.
A custodial account is an account opened in the name of a minor under the Uniform Transfer to Minors Act (UTMA), formerly a Uniform Gift to Minors Act (UGMA). In most states, minors do not have the right to contract, and therefore cannot own stocks, bonds, mutual funds, annuities or life insurance policies. In particular, parents cannot simply transfer assets to their minor children, but instead must transfer the assets to a trust. The most common trust for a minor is known as a custodial account (or an UTMA account).
If you are the custodian of the account, you maintain exclusive control of the account for the benefit of the minor, and, except by court order, are the only person entitled to make deposits to and withdrawals from the account. The minor is the sole beneficiary and is not allowed to transact any business on the account. Many people like this feature because the money is for the benefit of the child, yet the child cannot have access to the funds until he or she reaches the age of 18 or 21. Custodial accounts are irrevocable gifts to minors and the assets belong to the child.
Dividends earned on the account are reported under the Social Security number of the minor (beneficiary). Besides being able to create this custodianship, transfers are also allowed from: estates, trusts, guardianships, conservatorships, third parties indebted to the minor, depositories and insurance companies. You do not need to be related to the minor to be the custodian.
There is a minimum $10 deposit and balance required. You must maintain a minimum balance of $25 to earn dividends. Dividends are accrued daily and paid and compounded quarterly. While there can be income and estate tax savings by making a gift or transfer under an UTMA, you should contact your attorney for specific tax information and advice. There can be only one custodian and one minor (beneficiary) per custodial account. Either the custodian or the minor must be eligible for membership.
LIVING TRUST ACCOUNT
An account for a living trust can be opened only after the establishment of a Living Trust (generally with your attorney). A living trust may be revocable or irrevocable. A revocable trust allows the terms of the trust to be changed or altered once it is established. An irrevocable trust does not allow for such changes.
The account is owned by the trust, and the trustee(s) act as representative(s). Since the trustee(s) control the funds, the account is opened in the name of the trustee(s). At least one trustee or one beneficiary of the trust must be eligible for membership.
Star Choice Credit Union does not assume any involvement in the management, investment or decision-making duties involved with establishing a living trust, we do act as a depository institution for the trust.