New Form Available for Transfers to Minors
It is very common for SDRS members to name their children as beneficiaries on their SDRS accounts. Also consider that if you pass away while actively contributing, there may be family benefits payable to your children. But what if your child is a minor? How are SDRS payments made in these cases?
SDRS cannot make payments directly to minor children. Payments must be made to the child's conservator or custodian. The legal process for naming a conservator and/or establishing a trust can be lengthy and expensive. However, the Uniform Transfers to Minors Act (UTMA) is a law that provides a simple and inexpensive way to make transfers to minors with control held by a responsible adult (custodian) until the minor becomes of age.
SDRS has developed a new form pursuant to the South Dakota UTMA that allows members to appoint a custodian and successor custodian for minor children for purposes of SDRS benefit payments. Having this form completed and on file with SDRS allows a minor to receive assets without requiring trust documents or court appointment of a conservator. Under the provisions of the UTMA, the assets belonging to the minor are controlled and managed by a custodian until the minor reaches 18 years of age.
If you have minor children, you may wish to consider completing SDRS Form E-5A "Transfer to Minor Form" to name a custodian and successor custodian. If you previously completed a Transfer to Minor form from SDRS, you may wish to complete this new form as it now allows you to appoint a successor custodian. If you have any questions regarding the South Dakota UTMA or the Transfer to Minor form, please contact the SDRS office toll-free at 1-888-605-SDRS (7377).
Beneficiary Designation Form: SDRS Form E-5
Transfer to Minor Form: SDRS Form E-5A
Please note: A separate form must be completed for each minor child you wish to name as a beneficiary.