Free · Walkthrough

Every form, twice explained.

A complete walk through all sixteen Zentru templates. Each field comes with a Professor explanation — precise, cited — and a Toddler explanation — short, plain, concrete. Pick your track, work top to bottom, and check the box.

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Track · Insurance-Funded Family Bank

Stand up a family bank.

Professor

The Insurance-Funded Family Bank track operationalizes the cash value of a participating whole life policy as an intergenerational lending facility. You will: (1) document the funding policy, (2) charter the lending body, (3) authorize a policy loan against cash value, and (4) align the death benefit so the bank is recapitalized at the insured's mortality.

Toddler

We are going to turn your special insurance into a piggy bank for your family. First we write down what the piggy bank is. Then we write the rules. Then we let someone borrow from it. Then we make sure it gets full again later.

  1. 01Document the whole life policy that funds the bank
  2. 02Charter the bank: rates, terms, approved purposes, default remedy
  3. 03Authorize the first policy loan to a family borrower
  4. 04Designate beneficiaries so the death benefit refills the bank
Track · Comprehensive Estate Plan

A complete estate plan.

Professor

The Comprehensive Estate Plan track produces the core instruments required to direct property at death, appoint fiduciaries during incapacity, and provide guidance to heirs. You will execute a will, healthcare proxy, financial power of attorney, guardianship designation (if minor children), inventory of assets, heir verification, and discretionary instruments such as charitable bequest, digital directive, education trust, funeral wishes, and pet care directive.

Toddler

We are going to write down everything important so your family knows what to do. Who gets your stuff. Who takes care of the kids. Who makes doctor choices. Where things are. What you want for your goodbye.

  1. 01Write your Letter of Intent — the human voice behind the legal pages
  2. 02Execute the Simple Will (with witnesses)
  3. 03Appoint a Healthcare Proxy and Power of Attorney
  4. 04Name a Guardian (if minor children) and inventory all assets
  5. 05Add discretionary documents: charitable, digital, education, funeral, pet
Templates

Walk through each one.

01 · Both Tracks

Letter of Intent

A signed expression of your wishes for heirs and trustees.

Why it exists

Professor

A non-binding precatory writing in which the testator articulates intent, values, and contextual narrative to inform the interpretation of dispositive instruments by fiduciaries and heirs.

Toddler

A letter that says, in your own words, what you want and why. It is not the law, but it helps everyone understand.

Legal effect

Professor

Generally non-binding; courts treat it as evidence of intent rather than a dispositive instrument. May be persuasive in construing ambiguous will provisions (see Restatement (Third) of Property §10.2).

Toddler

It does not force anyone to do anything. But if grown-ups are confused, the judge can read it to figure out what you meant.

How to execute

Professor

Sign and date in the presence of two disinterested witnesses. No notary required, but notarization strengthens evidentiary weight.

Toddler

Sign your name. Have two grown-ups (who don't get any of your stuff) watch and sign too.

Field-by-field

Author

  • Full legal nametext

    Professor

    Use your full legal name as it appears on government identification to ensure unambiguous identification across instruments.

    Toddler

    Write your whole name, the same way it shows on your ID card.

  • Date of birthdate

    Professor

    Birth date corroborates identity and helps distinguish individuals with similar names.

    Toddler

    When you were born. So nobody mixes you up with someone else.

Intent

  • Statement of intenttextarea

    Professor

    Articulate values, hopes, and the rationale behind your dispositive choices. Avoid creating new gifts here — the will controls disposition.

    Toddler

    Tell your family what you hope for. Don't give new presents here — that's the will's job.

Witnesses

  • Witness onetext

    Professor

    First disinterested witness, full name.

    Toddler

    First grown-up watcher's name.

  • Witness twotext

    Professor

    Second disinterested witness, full name.

    Toddler

    Second grown-up watcher's name.

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02 · Comprehensive Estate Plan

Simple Will

Last will and testament for straightforward estates.

Why it exists

Professor

A last will and testament directing the disposition of probate property at death and nominating a personal representative (executor) to administer the estate.

Toddler

The paper that says who gets your things when you die, and who is in charge of giving them out.

Legal effect

Professor

Upon death and admission to probate, the will becomes the controlling instrument for non-survivorship, non-beneficiary-designated assets. Beneficiary-designated and jointly held property pass outside the will.

Toddler

When you die, a judge looks at the will and follows it for the things you owned alone. Things with a name on them (like life insurance) go straight to that person.

How to execute

Professor

Most U.S. jurisdictions require: testator signature, two witnesses present at the same time, attestation clause. A self-proving affidavit before a notary obviates witness testimony at probate.

Toddler

You sign it. Two grown-ups watch you sign and they sign too. Going to a notary makes it stronger.

Field-by-field

Testator

  • Full legal nametext

    Professor

    Full legal name of the testator.

    Toddler

    Your whole name.

  • Residence addresstextarea

    Professor

    Domicile address — establishes which state's probate code governs.

    Toddler

    Where you live. This decides which state's rules are used.

Executor

  • Executor full nametext

    Professor

    Personal representative who will marshal assets, pay debts, and distribute. Choose someone organized, trustworthy, and likely to outlive you.

    Toddler

    The boss of your stuff after you die. Pick someone careful who you trust.

  • Relationshiptext

    Professor

    Relationship clarifies standing and helps avoid impersonation.

    Toddler

    How you know them — like 'my sister'.

Bequests

  • Itemized bequeststextarea

    Professor

    Specific gifts of identifiable property, followed by residuary clause. Be specific: 'my 2018 Subaru Outback to my brother John,' not 'my car to John.'

    Toddler

    List who gets what. Be very clear. Say the exact thing — not 'my car' but 'my blue Subaru.'

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03 · Comprehensive Estate Plan

Healthcare Proxy

Appoint someone to make medical decisions for you.

Why it exists

Professor

Appoints an agent to make healthcare decisions when the principal lacks capacity. Often paired with a living will / advance directive.

Toddler

Picks who decides about doctors and medicine if you can't decide for yourself.

Legal effect

Professor

Authority springs upon a clinician's determination of incapacity. Provider compliance is supported by state advance-directive statutes and HIPAA authorization.

Toddler

Only works when a doctor says you can't decide. Then your person decides for you.

How to execute

Professor

Most states require either two witnesses or a notary. Distribute copies to your physician and hospital.

Toddler

Two grown-ups watch and sign, OR go to a notary. Give a copy to your doctor.

Field-by-field

Proxy

  • Proxy full nametext

    Professor

    Healthcare agent — choose someone who can advocate under stress.

    Toddler

    The person who decides for you. Pick someone calm and brave.

  • Proxy phonetel

    Professor

    24/7 reachable number for emergency room contact.

    Toddler

    Their phone — one that they always answer.

Wishes

  • End-of-life wishestextarea

    Professor

    Articulate preferences: life-sustaining treatment, artificial nutrition/hydration, pain management, organ donation. Specificity reduces conflict.

    Toddler

    Say what you want. Like: 'no machines if I won't wake up.' Being clear keeps the family from fighting.

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04 · Comprehensive Estate Plan

Power of Attorney

Authorize an agent to act on financial matters.

Why it exists

Professor

Authorizes an agent to act on the principal's behalf in financial matters. May be general (broad), limited (specific), or springing (effective on incapacity).

Toddler

Picks someone to handle your money stuff if you can't.

Legal effect

Professor

The agent owes fiduciary duties (loyalty, prudence, accounting) under the Uniform Power of Attorney Act, where adopted. Misuse can be elder-abuse.

Toddler

The person you pick has to be honest with your money. If they cheat, it's a crime.

How to execute

Professor

Notarization is standard; some states require witnesses additionally. Provide certified copies to banks.

Toddler

Go to a notary. Maybe also have grown-ups watch. Give banks a copy.

Field-by-field

Agent

  • Agent full nametext

    Professor

    Attorney-in-fact. Choose someone with financial competence and integrity.

    Toddler

    Your money helper. Pick someone good with money AND honest.

  • Relationshiptext

    Professor

    Relationship informs scrutiny under elder-abuse statutes.

    Toddler

    How you know them.

Scope

  • Scope of authorityselect

    Professor

    General is broad and powerful. Limited is narrow. Springing avoids active power until incapacity is established but can delay action.

    Toddler

    General = lots of power. Limited = just one thing. Springing = only when you can't decide.

  • Additional notestextarea

    Professor

    Carve-outs, gifting authority, ability to fund a trust, etc. Be explicit — courts construe POAs narrowly.

    Toddler

    Extra rules. Be very clear — judges read these strictly.

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05 · Comprehensive Estate Plan

Guardianship Designation

Name a guardian for minor children.

Why it exists

Professor

Nominates a guardian of the person (and optionally guardian of the estate) for minor children should both legal parents be unavailable.

Toddler

If something happens to mom and dad, this picks who takes care of the kids.

Legal effect

Professor

Nomination is given great weight by the probate court but is not absolute; the court applies the best-interests standard.

Toddler

The judge usually listens to your pick, but the judge has the final word — they always do what's best for the kid.

How to execute

Professor

Typically incorporated into the will or executed as a standalone instrument with the same formalities as a will.

Toddler

Usually inside the will. Same signing rules.

Field-by-field

Children

  • Children full names and DOBstextarea

    Professor

    Each minor child's full name and date of birth.

    Toddler

    Each kid's whole name and birthday.

Guardian

  • Guardian full nametext

    Professor

    Proposed guardian — confirm willingness in advance.

    Toddler

    The grown-up you pick. Ask them first!

  • Relationshiptext

    Professor

    Relationship to the children.

    Toddler

    How they know the kids.

  • Addresstextarea

    Professor

    Current residence — relevant to school district and court jurisdiction.

    Toddler

    Where they live.

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06 · Comprehensive Estate Plan

Asset Inventory

Tangible and digital assets, accounts, and locations.

Why it exists

Professor

A schedule of property — financial accounts, real property, tangible personal property, and digital assets — to guide the personal representative in marshalling the estate.

Toddler

A list of everything you own and where it lives. So the boss can find it all.

Legal effect

Professor

Not dispositive. Used by the executor to file the estate inventory required by most states (commonly within 90 days of qualification).

Toddler

It doesn't decide who gets what. It just helps the boss know what's there.

How to execute

Professor

No formalities. Update annually.

Toddler

Just write it. Update it once a year.

Field-by-field

Accounts

  • Bank accountstextarea

    Professor

    List bank, account type, last four digits only. Never write the full account number or PIN here.

    Toddler

    Bank name and the LAST FOUR numbers only. Never write the whole number. Never write your password.

  • Investment accountstextarea

    Professor

    Brokerage, retirement (IRA/401k), HSA. Note beneficiary designations — those override the will.

    Toddler

    Stocks and retirement money. Note: these often have a name attached that wins over the will.

Property

  • Real estatetextarea

    Professor

    Address, parcel ID, titling form (sole, JTWROS, tenancy in common). Titling controls passage at death.

    Toddler

    House addresses. Write down whose name is on it. That decides who gets it.

  • Vehiclestextarea

    Professor

    Year, make, model, VIN. Title transfer follows state DMV procedures.

    Toddler

    Cars — year, brand, name, and the long ID number.

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07 · Comprehensive Estate Plan

Heir Verification Form

Capture the IDs and contact channels for each heir.

Why it exists

Professor

Captures identifying and contact data for each heir to enable rapid notification and to deter impersonation by unrelated claimants during administration.

Toddler

Writing down who your family is, with their info, so nobody can pretend to be them later.

Legal effect

Professor

No independent legal effect; serves administrative and evidentiary purposes during probate notice (e.g., WV §44-1-14a interested-party notice).

Toddler

It doesn't make anything legal by itself. It just helps the boss find your family fast.

How to execute

Professor

No formalities required; keep with the will.

Toddler

Just fill it out. Keep it with the other papers.

Field-by-field

Primary heir

  • Full nametext

    Professor

    Full legal name of the primary heir.

    Toddler

    Whole name of the most important person in line.

  • Relationshiptext

    Professor

    Familial or other relationship.

    Toddler

    How you're related — like 'daughter.'

  • Emailemail

    Professor

    Best electronic contact.

    Toddler

    Their email.

  • Phonetel

    Professor

    Best telephone contact.

    Toddler

    Their phone number.

  • Government ID numbertext

    Professor

    Government ID number (driver's license, passport). Avoid Social Security Numbers — store the last four only if necessary.

    Toddler

    Their ID number. Do NOT use the secret nine-digit number — that's not safe.

Secondary heir

  • Full nametext

    Professor

    Backup heir, if primary cannot serve.

    Toddler

    Backup person's whole name.

  • Relationshiptext

    Professor

    Relationship of secondary heir.

    Toddler

    How you know them.

  • Emailemail

    Professor

    Email of secondary heir.

    Toddler

    Their email.

  • Government ID numbertext

    Professor

    Government ID of secondary heir; same rules as above.

    Toddler

    Their ID number — not the secret nine-digit one.

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08 · Comprehensive Estate Plan

Education Trust

Stage funds for education milestones (age 18 / 22 / 25).

Why it exists

Professor

An express trust funded for the educational benefit of a named beneficiary, with staged distributions tied to age or milestones to discourage dissipation.

Toddler

A locked piggy bank just for school. The money comes out at certain ages so it's not all spent at once.

Legal effect

Professor

Once funded and properly executed, creates a fiduciary duty in the trustee under the applicable state Trust Code (e.g., WV §44D). Distributions follow the trust instrument, not the will.

Toddler

When you sign and put money in, the trustee MUST follow the rules. The judge can make them.

How to execute

Professor

Signed by settlor; trustee acceptance recommended. Funding requires retitling assets to the trust or naming the trust as beneficiary.

Toddler

You sign. The person in charge says 'okay, I'll do it.' Then you put money in by writing the trust's name on the account.

Field-by-field

Beneficiary

  • Beneficiary nametext

    Professor

    The minor or student who will benefit. Use full legal name.

    Toddler

    The kid who gets the school money. Whole name.

  • Date of birthdate

    Professor

    Date of birth — anchors the age-based release schedule.

    Toddler

    Their birthday. The dates for getting money are based on it.

Funding

  • Principal amount (USD)number

    Professor

    Initial corpus. Document the source of funds for tax basis and potential gift tax reporting (Form 709 over the annual exclusion).

    Toddler

    How much money goes in at the start.

  • Release scheduletextarea

    Professor

    Define triggering events (age, milestone) and permitted purposes (tuition, fees, books, room/board). Consider HEMS standards or specific dollar caps.

    Toddler

    Write down when money comes out, and what it can be spent on. Like 'age 18: school costs.'

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09 · Comprehensive Estate Plan

Charitable Bequest

Direct a portion of your estate to causes.

Why it exists

Professor

Directs a portion of the estate to a qualified charitable organization, potentially generating an estate tax deduction under IRC §2055.

Toddler

Gives some of your stuff to a good cause when you die.

Legal effect

Professor

Charitable bequests reduce the taxable estate and may qualify for an unlimited deduction if the donee is a §170(c) organization.

Toddler

Money to charity doesn't get taxed. Other gifts might.

How to execute

Professor

Incorporated into the will or as a beneficiary designation on a financial account.

Toddler

Either inside your will, or by naming the charity on an account.

Field-by-field

Charity

  • Charity nametext

    Professor

    Use the legal name as it appears on the IRS Exempt Organizations search.

    Toddler

    The charity's official name. Look it up.

  • EIN / registration numbertext

    Professor

    Federal EIN ensures the right entity receives the gift and qualifies for the deduction.

    Toddler

    The charity's tax number. Makes sure the right one gets it.

Gift

  • Amount or percentagetext

    Professor

    Specific dollar amount, percentage of residuary, or specific asset.

    Toddler

    How much — a number, a percent, or a thing.

  • Designated purposetextarea

    Professor

    Restricted purposes are enforceable but can be hard to honor over decades. Consider 'preferred purpose' language with discretion to redirect.

    Toddler

    If you say what it's for, they HAVE to do that. Allow them to switch if it stops making sense.

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10 · Comprehensive Estate Plan

Digital Asset Directive

Email, social, crypto custody, and access instructions.

Why it exists

Professor

Provides authority and instructions for the disposition of digital assets under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), adopted in most states.

Toddler

Tells your family what to do with your email, social media, and online stuff.

Legal effect

Professor

Under RUFADAA, an online tool's legacy contact controls first; this directive controls next; the will controls last. Without any of these, federal computer-fraud and stored-communications laws may block fiduciary access.

Toddler

Without this paper, the law might stop your family from getting into your email. So this is important.

How to execute

Professor

Sign and date. Update when accounts change.

Toddler

Sign it. Update when you make new accounts.

Field-by-field

Accounts

  • Email accountstextarea

    Professor

    List providers (Gmail, Outlook). Do NOT include passwords.

    Toddler

    Email companies. Do NOT write your passwords.

  • Social accountstextarea

    Professor

    List handles per platform. Reference each platform's legacy/memorialization tool.

    Toddler

    Your usernames on each app. Each app has a 'memorial' setting too.

  • Crypto custody (vault location, never seed phrases)textarea

    Professor

    Identify the custodian (exchange) or the LOCATION of self-custody hardware/seed storage. Never write the seed phrase or private key here.

    Toddler

    Where the crypto wallet is. NEVER write the secret words. Just say 'in the safe.'

Instructions

  • Access instructionstextarea

    Professor

    Provide step-by-step retrieval guidance for the fiduciary, citing where credentials are stored (e.g., password manager + emergency kit).

    Toddler

    Tell the boss where the password book is. Don't put passwords in here.

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11 · Comprehensive Estate Plan

Funeral Wishes

Service style, burial vs cremation, readings, music.

Why it exists

Professor

Documents disposition preferences (burial, cremation, green burial) and ceremony details to relieve survivors of decisions during grief.

Toddler

Says what kind of goodbye you want, so your family doesn't have to guess.

Legal effect

Professor

Generally precatory, but many states (e.g., WV §16-30C) recognize a binding 'designation of agent for disposition of remains.'

Toddler

Usually just a wish. Some states let you make it a real rule with a special form.

How to execute

Professor

Sign and share with next of kin and funeral provider.

Toddler

Sign and tell your family. Tell the funeral home too.

Field-by-field

Service

  • Styleselect

    Professor

    Choose disposition method. Cremation requires authorization paperwork at time of death.

    Toddler

    Which kind. Cremation needs an extra paper later.

  • Preferred locationtext

    Professor

    Cemetery, scattering site, or facility.

    Toddler

    Where it happens.

  • Readings, music, notestextarea

    Professor

    Readings, music, officiant, dress code, gathering preferences.

    Toddler

    Songs, words, who speaks, what to wear.

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12 · Comprehensive Estate Plan

Pet Care Directive

Name a caretaker and fund care for your pets.

Why it exists

Professor

Names a caretaker and optionally a pet trust to fund care. In most states a pet trust is enforceable under UTC §408.

Toddler

Picks who takes the pets and gives them money to do it.

Legal effect

Professor

A simple designation is precatory. A pet trust is enforceable and can survive the pet's life with a remainder gift.

Toddler

Just naming someone is a wish. Making a pet trust makes it real.

How to execute

Professor

Confirm caretaker willingness. Fund any stipend through the will or a small trust.

Toddler

Ask the person first! Put the money in through the will.

Field-by-field

Pets

  • Pets (name, species, age)textarea

    Professor

    Identify each animal — species, breed, age, microchip number.

    Toddler

    Each pet — what it is, how old, and the chip number.

Caretaker

  • Caretaker full nametext

    Professor

    Primary caretaker; consider naming a backup.

    Toddler

    The person who takes them. Pick a backup too.

  • Caretaker phonetel

    Professor

    Direct contact for emergency handoff.

    Toddler

    Their phone.

  • Stipend (USD)number

    Professor

    Annual or lump-sum amount. Estimate based on remaining life expectancy and annual costs.

    Toddler

    How much money you give. Think: how many years times yearly cost.

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13 · Insurance-Funded Family Bank

Whole Life Policy Summary

Document the dividend-paying whole life policy that capitalizes the family bank.

Why it exists

Professor

Documents the participating whole life policy whose accumulating cash value capitalizes the family bank. The policy is the reservoir; without it there is no bank.

Toddler

Writes down the special insurance that fills the family piggy bank.

Legal effect

Professor

Documentary only. The policy itself is the contract; this summary is a working reference for the trustee/banker.

Toddler

It's a cheat sheet. The real rules are in the insurance company's papers.

How to execute

Professor

No formalities. Update annually as cash value grows.

Toddler

Just fill it in. Update it every year.

Field-by-field

Policy

  • Insurance carriertext

    Professor

    The mutual insurance company issuing the participating policy. Mutual carriers pay dividends to policyholders.

    Toddler

    Which insurance company. Mutual ones share profits with you.

  • Policy numbertext

    Professor

    Unique identifier for the policy contract.

    Toddler

    The policy's number.

  • Issue datedate

    Professor

    Anchors policy duration; older policies often have higher cash-value-to-premium ratios.

    Toddler

    The day it started. Older = usually more money saved up.

  • Death benefit (USD)number

    Professor

    Face amount payable at death — the eventual recapitalization of the bank.

    Toddler

    How much the family gets when you die. This refills the piggy bank.

  • Annual premium (USD)number

    Professor

    Yearly contractual outlay to keep the policy in force.

    Toddler

    How much you pay each year to keep it going.

  • Current cash value (USD)number

    Professor

    The borrowable equity inside the policy. This is what the bank lends against.

    Toddler

    The money inside the piggy bank you can borrow from RIGHT NOW.

  • Dividend rate (%)number

    Professor

    Declared dividend rate; subject to insurer board declaration annually.

    Toddler

    Bonus money rate. Changes each year.

Owner & Insured

  • Policy ownertext

    Professor

    Owner controls the policy — beneficiaries, loans, surrender. Often the insured, sometimes a trust.

    Toddler

    Who is in charge of the policy. Often you. Sometimes a trust.

  • Insuredtext

    Professor

    Person whose mortality triggers the death benefit.

    Toddler

    The person whose life it's on.

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14 · Insurance-Funded Family Bank

Family Bank Charter

Charter that governs how the family bank lends, repays, and reports.

Why it exists

Professor

The constitutional document of the family bank. Establishes governance, lending standards, and remedies. Without a charter, intra-family loans risk recharacterization as gifts.

Toddler

The rule book for the family bank. Without rules, the IRS might say loans are really presents.

Legal effect

Professor

Internal governance instrument. Helps establish bona fide debtor-creditor relationships under IRC §7872 (below-market loan rules) when paired with executed promissory notes.

Toddler

Helps prove loans are real loans, not gifts. The IRS cares a LOT about this.

How to execute

Professor

Signed by the founding 'banker' and family members who consent to the lending standards.

Toddler

Signed by you and the family who agrees to the rules.

Field-by-field

Bank

  • Family bank nametext

    Professor

    Use a distinctive name (e.g., 'The Smith Family Bank') to reinforce its identity.

    Toddler

    Give it a name like 'The Smith Family Bank.'

  • Founding datedate

    Professor

    Date of charter execution. Anchors interest-rate elections to AFR tables.

    Toddler

    The day you start it.

  • Funding policy numbertext

    Professor

    References the whole life policy from the prior template.

    Toddler

    The insurance number from the last form.

Lending rules

  • Minimum interest rate (% — at or above AFR)number

    Professor

    Set at or above the Applicable Federal Rate (AFR) published monthly by the IRS. Below-AFR loans trigger imputed interest under §7872.

    Toddler

    Has to be at least the IRS's number (the AFR). Lower than that = the IRS pretends you charged it anyway.

  • Maximum loan term (months)number

    Professor

    Term governs which AFR applies: short-term (≤3 yrs), mid-term (3–9 yrs), long-term (>9 yrs).

    Toddler

    How long someone can take to pay back. Different lengths use different IRS numbers.

  • Approved loan purposestextarea

    Professor

    List uses the bank will fund: education, first home, medical, business seed. Discourages frivolous draws.

    Toddler

    What the money can be used for. Like school or a first house. Not vacations.

  • Default remedytextarea

    Professor

    What happens if a borrower defaults. Common: offset against future inheritance share, written forbearance, or hardship deferral.

    Toddler

    What happens if someone doesn't pay back. Often: comes out of their share later.

Governance

  • Trustee / bankertext

    Professor

    The 'banker' — typically the policy owner. Owes a duty of fairness across siblings.

    Toddler

    Who runs the bank. Usually you. Has to be fair to all the kids.

  • Loan review cadenceselect

    Professor

    Frequency of loan portfolio review. Annual is the floor for credibility.

    Toddler

    How often you check on the loans. At LEAST once a year.

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15 · Insurance-Funded Family Bank

Policy Loan Authorization

Formal request to draw against the policy's cash value to fund a family loan.

Why it exists

Professor

Formal authorization to draw against the policy's cash value and on-lend the proceeds to a family borrower under the charter's terms.

Toddler

The paper that says 'okay, take some money out of the piggy bank and lend it to Aunt Sue.'

Legal effect

Professor

Two transactions: (1) the policy loan from the carrier — interest accrues to the policy and uncollected interest reduces death benefit; (2) the family loan, which must be papered with a separate promissory note at AFR.

Toddler

Two things at once: borrow from the insurance, then lend to family. BOTH need their own paper.

How to execute

Professor

Submit Loan Request to carrier; execute promissory note with borrower; record on the loan ledger.

Toddler

Send a request to the insurance. Have your family member sign a promise note. Write it in the ledger.

Field-by-field

Source policy

  • Carriertext

    Professor

    Insurance carrier processing the policy loan.

    Toddler

    Which insurance company.

  • Policy numbertext

    Professor

    Source policy number.

    Toddler

    The policy number.

Loan

  • Loan amount (USD)number

    Professor

    Maximum is the policy's loan value (typically ~90–95% of cash value).

    Toddler

    How much. Usually no more than 90% of what's in there.

  • Borrower (family member)text

    Professor

    Family borrower. Verify capacity to repay.

    Toddler

    Who is borrowing. Make sure they can pay back.

  • Purpose of fundstextarea

    Professor

    Tie to a charter-approved purpose. Document the use to defend bona fides.

    Toddler

    What it's for. Must match the rule book.

  • Interest rate (%)number

    Professor

    Must equal or exceed AFR for the loan term. The carrier's loan rate is separate.

    Toddler

    At least the IRS's AFR. The insurance has its own rate too.

  • Repayment scheduletextarea

    Professor

    Monthly amortization is cleanest. Consider a balloon for short-term liquidity loans.

    Toddler

    How and when they pay back. Monthly is easiest.

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16 · Insurance-Funded Family Bank

Beneficiary Designation

Keep the policy's death benefit pointed at the family bank or named heirs.

Why it exists

Professor

Directs the death benefit. In a family bank structure, the death benefit recapitalizes the bank — so beneficiary alignment is mission-critical.

Toddler

Decides who gets the big insurance check. For the family bank, the check should refill the piggy bank.

Legal effect

Professor

The beneficiary designation overrides the will. Wrong designation = wrong recipient, irrespective of testamentary intent.

Toddler

This BEATS the will. If it's wrong here, the will can't fix it.

How to execute

Professor

File the carrier's beneficiary form. Confirm receipt in writing. Re-confirm after life events.

Toddler

Send the form to the insurance. Get them to say 'got it.' Check again after weddings, births, deaths.

Field-by-field

Policy

  • Carriertext

    Professor

    The insurance carrier holding the policy.

    Toddler

    Which insurance company.

  • Policy numbertext

    Professor

    The policy number.

    Toddler

    The policy's number.

Primary beneficiary

  • Primary beneficiarytext

    Professor

    Often a trust (the family bank trust) so the proceeds stay inside the structure.

    Toddler

    Often a trust — that keeps the money in the family system.

  • Relationshiptext

    Professor

    Relationship — or 'Trust' if a trust is named.

    Toddler

    How they're related. Or write 'Trust.'

  • Share (%)number

    Professor

    Sum of all primary shares must equal 100%.

    Toddler

    All the primary slices must add up to 100.

Contingent beneficiary

  • Contingent beneficiarytext

    Professor

    Backup if the primary predeceases.

    Toddler

    Backup person if the first one is gone.

  • Relationshiptext

    Professor

    Relationship of the contingent.

    Toddler

    How they're related.

  • Share (%)number

    Professor

    Sum of all contingent shares must equal 100%.

    Toddler

    Backup slices add up to 100 too.

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