Don’t Name Your Child As The Beneficiary

Don’t Name Your Child As The Beneficiary

When you have children, you’ll go to the ends of the earth to protect them and make sure they are safe and happy. It’s a major reason why parents buy life insurance — or the main one at least. Having life insurance means that if something happened to you, your children would be OK financially.

But, there might be something you don’t know… did you name the correct beneficiary on that policy?

It’s important, to make sure that you have named the correct beneficiary to your life insurance policy because that beneficiary will receive the proceeds of your life insurance policy if you were to die. If you are married, most often you’ve named your spouse and that spouse or partner will receive the money upon your death.

What do you do if you are a single parent? If your minor child has been named as the beneficiary of your life insurance policy who receives the proceeds?

Minor children cannot directly receive the proceeds of a life insurance policy. Instead, the proceeds will be paid directly to the legal custodian of your child assuming that the legal custodian will manage the proceeds in good faith on your child’s behalf. 

I recently received a call from a concerned family member.  His cousin “Nancy” had unexpectedly passed away. “Nancy” was recently divorced and left behind a 10-year-old son. Nancy did not have a large estate but had one life insurance policy through her employer where she designated her son as the beneficiary. 

Unfortunately for “Nancy”, she died without a Will with legal instructions on who or how her money would be managed for her son.  As a result, the proceeds of her insurance policy was paid directly to her former spouse with no strings attached. Her former spouse was free to spend the proceeds as he wished and there was nothing Nancy’s family could do to stop this. 

Making sure your children are ok – means thinking about the future now.

You can prepare a Will with provisions that sets forth your exact wishes. Your Will should spell out the person you choose as the trustee and how you’d like the money to be managed and spent. While it may seem like a big job to get this step right, keep in mind that not doing so could have repercussions for your children for many years to come.

If you have a life insurance policy and name a child as the beneficiary, but you do not have a Will, I would love to help you get that in place – to give you peace of mind knowing that your children will be ok when that time comes. Please reach out, by getting started here.


Subscribe to our newsletters

Subscribe to one or more of our newsletters, delivering meaningful insight on topics that matter to you and your family.
ebl home subscribe image


Latest Blog Posts

If you and your partner reside in Washington state and are unmarried, you each might qualify for the legal protections availed to you by law by classifying your relationship as a committed intimate relationship.

One of the greatest gifts you can give your family is to build an estate plan while you are alive and well. Estate planning allows you to formally communicate your wishes so they will not be up for interpretation by…

A co-executor can help facilitate the distribution of assets, minimize conflicts, and provide much-needed support to grieving families.

The law makes it easy for people to get out of bad marriages. Washington, like most states, acknowledges no-fault divorce. This means that if you want a court to dissolve your marriage, all you have to do is file for…

Washington state’s laws on non-marital relationships, including committed intimate relationships (CIRs), can be convoluted, especially in the absence of a cohabitation agreement. Given the ambiguity that exists for unmarried partners in Washington state, thinking about the future and what it could look like is more important than ever. This is especially true in terms of aging, incapacity, and death. Fortunately, you can address each of these issues in a comprehensive estate plan.

Prenups and postnups can strengthen a marriage, given how they require relationship partners to put their cards on the table for each other to see, offering transparency and peace of mind. Despite their similarities, there are a few significant differences between the two.

Child support is one of the most contentious issues in divorce cases where parties have minor children. Even though Washington state law uses the same complex mathematical formula to determine the amount of child support for each child, there is…

Family law and estate planning often intersect. This is particularly true when contemplating divorce, remarriage, or blending families.

At some point during your divorce case, friends and family members whose own marriages ended in divorce probably told you that it gets better, and it does. Of course, from your perspective, getting out of a bad marriage might be…

Co-parenting over a long distance when you are a non-residential parent does not have to equate to sacrificing involvement in your children’s lives. But it likely does mean you will have to make tweaks in your communication and parenting style to accommodate the new living arrangement.