February 2005
Account Transfers:
There would probably be a tendency for a parent to contribute to his or her children’s accounts while neglecting his or her own. An average working class family of four probably won’t be able to afford annual contributions of $1,000 for each family member even if both parents are wage earners. However, these new accounts will have the additional option of being transferable. This will allow the remaining balance of a person’s account to flow into accounts for his or her children or grandchildren. Legal guardians would enjoy the same account transfer privileges as parents. These will be the only acceptable methods of account transfer. If an account holder wishes to leave assets to non-qualifying heirs or to charity, his or her remaining lifetime contributions may be taken out of the system. Such disbursements will be subject to any applicable estate taxes.
Both contributions and accrued interest may flow directly into the accounts of a spouse or dependent children. Therefore, a wife may inherit the accrued interest of her husband. This money will be added to the amount of accrued interest in her own account. She will have no other claim to this accrued interest than belongs to any other holder of accrued interest. Monthly distribution checks will not be issued until said benefactors are of retirement age.
The contributions of people with no heirs or other claims against their estate will go towards the administrative expenses of this program, and the accrued interest will go towards the national debt.
In summary, a person may elect to designate a percentage of his or her remaining contributions to the account of a spouse, child, or grandchild. Also, accrued interest is eligible for transfer to a spouse or dependent child. An account holder would have the ability to designate how these account assets would be distributed upon the event of his or her death. This would provide the account holder with the ability for estate planning. All contributions not eligible for inheritable transfers may be taken out of the system to be distributed at will.
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