Leaving Life Insurance and Retirement Accounts for Your Child
In deciding who to name as the beneficiary of your life insurance or retirement plan, you will likely want to provide for your child if you and your spouse are deceased. However, you should not name a minor as the outright beneficiary or contingent beneficiary. Your will can also provide that any monies payable from your estate to your child should be held in a trust for their benefit and then given to them outright at a certain age. Putting these assets in trust allows your child to be taken care of in your absence and avoids the monies being held in a non-interest bearing account for the minor child until they reach the age of 18, at which time they will receive a distribution outright of the full amount. More advanced estate planning can provide for a Descendant’s Trust that can protect your children from creditors, estate taxes and from having to sign a prenuptial agreement to protect their inheritance in case of divorce.