Can you name your child as beneficiary?
Can you name your child as beneficiary?
It’s a common practice in the life insurance industry, as minors are not allowed to be listed as direct beneficiaries. A custodian serves as the guardian of the money and assets intended for the minor child, making way for valid transfers under the Uniform Transfers to Minors Act.
How old do you have to be to be a beneficiary?
Even if a child is at the legal age to be a beneficiary (whether that’s 18 or 21), the child may not have the maturity to manage a large amount of money. This is why many parents in their estate planning establish trusts that a child cannot touch until they are older.
What’s the best way to name a child as a beneficiary?
The best option is establishing a trust for your child and naming the trust as the beneficiary. If you recently became a parent, the safety and well-being of your child is paramount. It is no wonder that the birth of a child is usually a motivator to get life insurance coverage.
Can a parent be the sole beneficiary of a life insurance policy?
Occasionally, a parent may even designate one particular adult child as the sole beneficiary of all accounts or a life insurance policy with the intent that this particular child will equally share the remaining balance with their siblings.
Can a parent designate a separate beneficiary for each child?
Sometimes parents will designate a separate child as beneficiary for each of their accounts. Over time, the ending balances of these accounts can differ significantly with one child receiving much more than the other, which may not have been the parent’s intention upon their death.
How can I make my child a beneficiary of life insurance?
There are a number of options you can choose instead to make sure your children receive the benefits of your life insurance planning. Under the Uniform Transfers to Minors Act, you can set up an account for your child with a financial institution, such as a bank or life insurance company. (This is in effect for most states.)
How can I name my Child as a beneficiary?
You can also establish a trust for your child and name the trust as the beneficiary of the policy. This is a more precise, albeit complex, way to ensure that your exact wishes for your children are followed.
Sometimes parents will designate a separate child as beneficiary for each of their accounts. Over time, the ending balances of these accounts can differ significantly with one child receiving much more than the other, which may not have been the parent’s intention upon their death.
Occasionally, a parent may even designate one particular adult child as the sole beneficiary of all accounts or a life insurance policy with the intent that this particular child will equally share the remaining balance with their siblings.
Can a child be a beneficiary of an inheritance?
Even if a child is at the legal age to be a beneficiary (whether that’s 18 or 21), the child may not have the maturity to manage a large amount of money. This is why many parents in their estate planning establish trusts that a child cannot touch until they are older.