We’re here to help you discover all your options and make decisions with confidence.
FREE Estate Planning Webinar Sign Up Now!

Schedule Your Consultation Today!

(407) 574-8125

Be Careful Not to Name Minors as Your Beneficiaries

Get The Legal Help You Need
Home » Be Careful Not to Name Minors as Your Beneficiaries

Related Practice Areas


Warning: Undefined variable $product_tags in /home/usercpxy/domains/familyfirstfirm.com/public_html/wp-content/plugins/oxygen/component-framework/components/classes/code-block.class.php(128) : eval()'d code on line 6
No Results Found

Be Careful Not to Name Minors as Your Beneficiaries

August 25, 2021
Geoff Hoatson

Most people want to pass their assets to their children or grandchildren, but naming a minor as a beneficiary can have unintended consequences. It is important to make a plan that doesn’t involve leaving assets directly to a minor.

There are two main problems with naming a minor as the beneficiary of your estate plan, life insurance policy, or retirement account. The first is that a large sum of money cannot be left directly to a minor. Instead, a court will likely have to appoint a conservator to hold and manage the money. The court proceedings will cost your estate, and the conservator may not be someone you want to oversee your children’s money. Depending on the state, the conservator may have to file annual accountings with the court, generating more costs and fees.

The other problem with naming a minor as a beneficiary is that the minor will be entitled to the funds from the conservator when he or she reaches age 18 or 21, depending on state law. There are no limitations on what the money can be used for, so while you may have wanted the money to go toward college or a down payment on a house, the child may have other ideas.

The way to get around these problems is to create a trust and name the minor as the beneficiary of the trust. A trust ensures that the funds are protected by the trustee until a time when it makes sense to distribute them. Trusts are also flexible in terms of how they are drafted. The trust can state any number of specifics on who receives property and when, including allowing you to distribute the funds at a specific age or based on a specific event, such as graduating from college. You can also spread out distributions over time to children and grandchildren.

If you do create a trust, remember to name the trust as the beneficiary of any life insurance or retirement plans. If you forget to take that step, the money will be distributed directly to the minor, negating the work of creating the trust.

To create a trust that fits your specific needs, consult with the Elder Law Experts at Family First Firm.

Copyright © 2022. Family First Firm – Medicaid & Elder Law Attorneys. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
Family First Firm – Medicaid & Elder Law Attorneys
(407) 574-8125
https://familyfirstfirm.com
Share This Blog

Our Locations

Orlando Office

Family First Firm - Medicaid & Elder Law Attorneys

1901 W Colonial Dr,
Orlando, FL 32804

Get Direction

Altamonte Springs Office

Family First Firm - Medicaid & Elder Law Attorneys
By Appointment Only

715 Douglas Ave Suite# 40,
Altamonte Springs, FL 32714

Get Direction

Get free legal advice sent to your inbox

Name(Required)

The information you obtain at this site is not, nor is it intended to be, legal advice.
You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship