What are the laws regarding a beneficiary who is a minor?
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What are the laws regarding a beneficiary who is a minor?
My mother-in-law just informed us, after her step-father died, that he made my 8-year-old daughter 1 of the beneficiaries on his life insurance policy. She gave my husband a form to sign and had him write on the form that my daughter is a minor. She wants us to split the money between my daughter and her brother, because her brother was born after he named her as beneficiary. I thought it was kind of weird that they would just allow my husband’s signature with a write in of minor, and that we would be allowed to just split it. What are the laws for minors as beneficiaries?
Asked on October 3, 2011 under Estate Planning, Missouri
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The rules regarding the inheritance of money by minors varies from state to state. Generally if a minor inherits through a Last Will and Testament then the decedent can direct how the funds are held - a trust, fund a 529 plan - what ever. But when they are left outright as they are here the insurance company will allow the funds to be delivered to the guardian of the minor. A parent is a natural guardian. Some insurance companies want the parent actually appointed by a court as well. Here, obviously not. So your husband can accept the funds on her behalf. Now, the money is hers and not her brothers. Their grandmother just feel that this is the right thing to do but her feelings are not binding on you. If the money had been left in a Will sometimes people state "grandchild x and any grandchildren born subsequent to the making of this Will." Again, not the case here. Good luck.
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