Life Insurance Trustees
Do I put my minor children’s names below mine as co-beneficiaries, or as contingent beneficiaries?
Does it make any difference? This is on an application form for life insurance on my husband. How many contingent beneficiaries can he have?
If we don’t name the children on the form and he instead names his brother as beneficiary who he wants to be the children’s guardian (in case my husband and I pass on together), the children lose all or any right to the benefits, don’t they? I am thinking he should not do this because if the brother dies later on, the money goes to his wife (my husband’s sister-in-law), and my children will be left penniless. My husband’s thinking is his brother needs money to provide for my children’s needs. I’m thinking he can name the brother as trustee who then has authority to use some funds for the children’s needs, but is supposed to separate his own bank account from the trust account.
Make the contingent bene a formal trust for your kids. Its possible to add additional language to the policy that states that if the kids are not minors anymore, then the Insurance Co can pay directly to them.
But don’t make it payable directly to your Brother in law. I recommend a lawyer as your Trustee or at least have a 2 person Trustee. It just provides additional assurances to you that your kids will be looked after in the event of common disaster.
Fiduciaries and Trust Owned Life Insurance
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