Life insurance and other death benefit policies are incredibly important, particularly if you have dependent children or other dependent family members.
Unfortunately, although many parents name their children as direct or contingent beneficiaries, what they don’t realize is that death benefits often cannot be distributed directly to an individual under the age of 18. If something were to happen to the parent (or both parents) while the child is still a minor, a Court may need to step in and appoint a conservator to manage the funds. And, when the child does turn 18, those assets may be given directly to the child without any supervision whatsoever.
Proper estate planning prevents unintended distributions to minors or other incapacitated individuals. A contingent trust in your Will can act as a fill-in beneficiary on your death benefit policies. The assets are then handled by a trustee that you nominate until your children are in a better place to do so themselves. As an added benefit, this type of plan allows you to direct your assets without costly Court intervention.
Review your death benefit designations on life insurance policies, retirement plans, or other accounts.
If you find you need advice in setting up an estate plan to help address these or other issues, stop in or call us at (320) 763-3141.