What are the things should I do to ensure that my children will receive some money from my insurance? 25 Answers as of February 07, 2014

I am an unmarried mother of 3 teenage children. I have a life insurance policy that I would like to make my father the beneficiary of so that he can distribute the money to my children at the appropriate ages. Is this all I need to do? Do I also have to name them as beneficiaries also?

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Christine Sabio Socrates Attorney at Law | Christine Socrates
The best way to make sure that your children receive the life insurance money is to establish a trust for them and have the proceeds payable to the trust. Your father can be appointed trustee of the trust and will need to abide by the provisions you set forth for your children regarding the distribution of money to them. I would be happy to assist you in this matter or you can retain any estate planning attorney as well. Good luck!
Answer Applies to: Ohio
Replied: 2/7/2014
Law Office of Pamela Braynon | Pamela Y. Braynon
You can name each child and the percentage of the benefit each would receive. If they are underage at the time of your death, the insurance company will release the money to whomever has custody or guardianship over the child but it would be in their name and can only be accessed with specific instructions.
Answer Applies to: Florida
Replied: 2/7/2014
Peters Law, PLLC
Peters Law, PLLC | Mark T. Peters, Sr.
That is the exact wrong thing to do. Even if your father can be trusted, he may face gift tax problems if the amount is large enough. My preferred method is to build a testamentary trust into your will with the proceeds of the life insurance going into your estate. Bills are paid and the remainder goes into trust for your children. Pick somebody to be trustee who will not be their guardian if they are minors. Then at the appropriate times and in the appropriate amounts, they can receive their shares. Talk with a good estate planning attorney about how to handle this.
Answer Applies to: Idaho
Replied: 2/4/2014
Kirby G. Moss PC | Kirby G. Moss
Safest way would be to establish Trust with father as Trustee to administer funds for benefit of children and of course, have him as trustee the beneficiary of the policy.
Answer Applies to: Indiana
Replied: 2/6/2014
James Law Group
James Law Group | Christine James
Do a trust, name the trust the beneficiary and your father the trustee with your children as beneficiaries. Don't rely on your father to just do it because anything can happen. For instance, what happens if he dies before he distributes the money? Do a trust.
Answer Applies to: California
Replied: 2/6/2014
    Strickland Law, PLLC
    Strickland Law, PLLC | Jeffrey S. Strickland
    You need to meet with counsel. If you left to your dad, and he did not plan his estate properly, the funds for your children could never make it to them. You need to execute the proper estate planning documents. At the least, you need a will with guardianship provision to ensure your children are raised by the people you desire. And a minor's trust is likely necessary.
    Answer Applies to: Tennessee
    Replied: 2/6/2014
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Advise you name your children as beneficiaries only, and leave father off policy. When time comes to distribute proceeds , and the children are minors, then your father can apply to court to be appointed guardian ad litem for the children; the court will require proceeds be placed in blocked trust accounts for each child's share.
    Answer Applies to: California
    Replied: 2/6/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    You could put your life insurance policy into a trust.
    Answer Applies to: California
    Replied: 2/6/2014
    Law Office of Patricia A. Simmons
    Law Office of Patricia A. Simmons | Patrica A Simmons
    You should contact a probate attorney to discuss the pros and cons on whether to name your father as a beneficiary of your insurance policy. Once your name a beneficiary of a policy, that individual is free to use the money how he/she sees fit. You may be better served to name your three children as the beneficiaries. If they are under 18, the insurance company will request that a guardian of the estate be appointed for the children. The guardianship of their estate will be in place until each child reaches the age of 18. In California, the guardian of the estate must either post a bond which totals the amount to be paid to each minor or have the funds placed in a blocked account and withdrawals made only with a court order.
    Answer Applies to: California
    Replied: 2/6/2014
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Make a will which creates a testamentary trust for your children, and have your father as the trustee, and name the trustee of the trust as beneficiary of the life insurance. If you just leave your father as beneficiary, what happens if he needs long-term care and all his assets are spent on it? Your kids life insurance money is gone, too. Same if he runs into tax or creditor problems, gets divorced too many things can go wrong. Get with an estate planning lawyer and do this right.
    Answer Applies to: Oregon
    Replied: 2/6/2014
    Danville Law Group | Scott Jordan
    What you propose is probably not the best way to handle this and will not ensure your children receive anything. If something happens to you, who will become your children's guardian? Or will their father take the children in? I suggest you consult with an estate planning attorney in your area for suggestions on how to structure this to make sure your children are taken care of.
    Answer Applies to: California
    Replied: 2/4/2014
    Sebby Law Office
    Sebby Law Office | Jayne Sebby
    If you want your children to inherit the money, name them as beneficiaries on the policy or name your estate as the beneficiary and then direct in your will that the money goes to your children. If a large amount of money is involved, put the funds in a trust for each child and direct when and how the money should be distributed. You can name your father as trustee. There are tax consequences to either choice so check with a tax expert before making a decision.
    Answer Applies to: Nebraska
    Replied: 2/4/2014
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If you make your father the beneficiary he has absolute right to do whatever he please with the money. You would be counting on him honoring what you request and could ignore that if he desired. If you make the children beneficiaries as well, subject to the money being held while they are minors, they can do what they want with it when they reach the age of majority. To control what happens you should consider having a trust created where the trustee is required to do what you state in the trust, with the trust made the beneficiary instead. To do this correctly, you should not do this on your own. I strongly advise you consult with an attorney who has experience with drafting trusts to review all of options and create the documents which best meet your desires. It would be money well spent rather than counting on others to do what you requested.
    Answer Applies to: California
    Replied: 2/4/2014
    Law Ofices of Edwin K. Niles | Edwin K. Niles
    That depends on how much you can trust Dad. You also face the probability that Dad will go first. You should discuss it with the insurance agent, but my suggestion is that you name Dad as trustee for the benefit of the children, to be distributed as each child reaches XX of age, with an alternate beneficiary under the same terms.
    Answer Applies to: California
    Replied: 2/4/2014
    Gates' Law, PLLC | Thomas E. Gates
    You should name the children as beneficiaries and not your dad. If they are minors at the time of your death, a trustee (Possible your dad) will manage the funds until they turn to the age of majority.
    Answer Applies to: Washington
    Replied: 2/4/2014
    Ashcraft & Ashcraft, Ltd.
    Ashcraft & Ashcraft, Ltd. | Randall C. Romei
    As the beneficiary of the insurance policy the death benefit would be your father's asset. Upon his death the policy would be part of his estate. Any action taken by your father to benefit the children with the funds would be a gift from your father to the children. It is possible to create evidence of your intent that would allow the children to prove the creation of a constructive trust that they could enforce against the fund created by the death benefit but an actual written trust is a more certain device to execute your intention, more clearly establishes your intention, protects the assets from your father's creditors, can outlive your father and is easier to enforce and control. If you made your children beneficiaries of the policy they would directly receive the death benefit upon your death. If they were minor's they would receive the funds into a custodial account and would have access to the funds when they reach age 18. If you make a trust the beneficiary and your father the first trustee of the trust then the terms of the trust would direct when and how the trustee, your father or a successor, would distribute the funds to the children.
    Answer Applies to: Illinois
    Replied: 2/4/2014
    Attorney At Law | James G. Maguire
    Set up a minor's trust, with your father as trustee. The funds can be used for education, support, etc. of your kids until the kids are adults. The trust would be the beneficiary of the life insurance.
    Answer Applies to: Louisiana
    Replied: 2/4/2014
    James T. Weiner & Associates, P.C.
    James T. Weiner & Associates, P.C. | James T. Weiner
    You need to write a trust and have the money go to the trustee of the trust for the benefit of your children. If you simply have your father the beneficiary he has no legal duty to distribute the money to your children ever.
    Answer Applies to: Michigan
    Replied: 2/4/2014
    Mains Law Office
    Mains Law Office | Julie Mains
    Your father would have no legal obligation to distribute it if you do it as you are proposing. You should really have a trust that is the beneficiary to insure that your minor children are taken care of according to your wishes.
    Answer Applies to: California
    Replied: 2/4/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    There are a number of ways to accomplish your wishes, including the one which you are proposing if your father is will, and survives, to do informally. Your problem is it will not be legally binding, the funds will be subject to his creditors. You should really spend a bit of time and money to do this right and get an estate plan in effect.
    Answer Applies to: Michigan
    Replied: 2/4/2014
    Frederick & Frederick PLC | James P Frederick
    I would establish a trust and name the kids as beneficiaries of the trust. Anything different is less than ideal. Naming your father, for instance, is problematic for many reasons. If you name him alone, the money is his, upon your death. That could result in the money passing to his spouse, if any, to his creditors, to the State of Michigan, (if he ever needs long term care), etc. A trust is the best way, bar none, to take care of minors.
    Answer Applies to: Michigan
    Replied: 2/4/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    If you name him the beneficiary he can do as he pleases. You may want to consider a trust. Speak with an estate planning attorney to address this and other estate issues. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
    Answer Applies to: Nevada
    Replied: 2/4/2014
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    It would be better to create a trust for your children and make it the beneficiary of your life insurance policy rather than your father. There are a number of things that can happen if you make him the beneficiary. If something happens to him and you don't change the policy, the money will go to his estate and be distributed according to his will or by intestacy if he leaves no will. Although you are probably sure it would never happen, it might be that he doesn't distribute the proceeds as you want. Once the proceeds are paid to him as beneficiary they are his to use as he pleases. I have seen this happen where a father left his brother as beneficiary. The father died suddenly and now the ex-wife is trying to get some of that money for the children, for whom it was intended. If your father has creditors they could attach that money even if he fully intends to pay it to your children, again because once it is paid to him it is his and not the children's. The cost of having a will and trust set up will be about $750-$1,000, which may seem expensive but the alternatives are too risky in my opinion.
    Answer Applies to: Utah
    Replied: 2/4/2014
    Fluhr & Moore, LLC | Steven S. Fluhr
    If you are sincere about your wishes, you need to name your children as equal beneficiaries. If you name your father, your children have no right to the money and will only get what your father decides. If you trust your father implicitly, and most people do, then your current plan will work.
    Answer Applies to: Missouri
    Replied: 2/4/2014
    Neal M. Rimer, Esquire
    Neal M. Rimer, Esquire | Neal M. Rimer
    If you name your father as the beneficiary, then he is the recipient of the gift. That money becomes part of his estate. If he gives money to your kids, then he is making a gift. Depending on the amount, there may be gift and estate tax consequences. You can name your children as the beneficiaries in equal percentages if you want. You might be able to name a custodian for the benefit of the children. (you could make your dad the custodian) until age 18 or perhaps even to age 25. If you are speaking about a larger sum of money, it might make sense to create an irrevocable trust. The irrevocable trust might become the owner and the beneficiary of the life insurance policy and proceeds (the policy and proceeds are therefore not a part of your estate) or just the beneficiary of the proceeds for the benefit of your children. You father could be named as the trustee. This gives the trustee much more flexibility on how to use the funds and control them until distributions to the children.
    Answer Applies to: California
    Replied: 2/4/2014
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