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Children as Beneficiaries

Children as Beneficiaries

Generally speaking, it’s a bad idea to name minor children as beneficiaries of things like life insurance policies, retirement accounts, etc. While it’s natural to want to leave things to your children if you should die, if they are minors, listing them as beneficiaries can have unintended results.

In many places the court will have to appoint someone to manage the money for the child, and the court may have strict requirements as to what the money can be used for. Anything involving the courts is usually a long, drawn-out process that can get expensive as well.

If you have minor children that you would like to inherit money or property if you die, it’s an excellent idea to consult an estate planning attorney to find the best way to do so in your area.

I’m legally required to name my son as beneficiary on my life insurance policy, so I named him as beneficiary of 1% to try to minimize those unintended results. A much larger portion is left to a trust instead, which will then go to him.

View Comments (2)
  • I think its a bit annoying that its harder to leave money to children. I understand why the rules are there, but ideally I would like a %age of my estate to go to one of my siblings who is underage, it doesn’t seem fair that they couldn’t access the money whilst everyone else could.

    On the other hand I’m planning to survive long enough that they’ll be really old when I die, so hopefully it won’t have any effects.

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