Insurance question

[Daisy&Max]

I'm a single mother with two kids. All of my life insurance has them as my beneficiaries. Now my SO and I are talking about making things more permanent in a year or so and possibly getting married after that. So my question is (and more just out of idle curiosity at this point) do most people change their beneficiary to their new spouse or leave it in their children's names?

I know that if your marriage came before your kids then it would be the husband of course but not sure how it works if you have kids and then find someone else. My kids are both under 10.

Just looking for some opinions on this.

Thanks,
Daisy

 

[wdwfan16]

I have not actually done this, still married to my first husband, but I would keep it in the kids name.

 

[Christine]

Assuming that you were married to the father of your children, your beneficiary would be your husband (the children's father). Upon your death, one would assume that the remaining parent would want to use the money to support the children.

When remarrying, the idea is: who do you want that money to benefit? If it is the children, I would leave it to the children. Unless your SO adopts your kids, he has no real responsibility to see that your children are supported with that money.

 

[Darcy03231]

I'm divorced and remarried. I have a policy that names my parents as trustee for my children and I have another policy that goes to my current husband. The terms of my divorce decree require me to carry life insurance for my children's benefit until they reach the age of 18 or graduate from high school.

 

[pearlieq]

Leave it to a trust for the support of your children.

Changing the beneficiary to your new husband is just too risky. The money needs to unequivocally directed to the care of your kids.

 

[Daisy&Max]

No I wasn't married before. I have my work insurance with my mother as the beneficiary but my other insurance I put in my kids' names. I never figured I would settle down so I figured if it was in the kids' names then my family would take care of it for them.

Thank you for the responses. I was thinking that it would be best to leave things the way they are but felt like maybe that sounds like I don't trust my SO. But I've had the kids longer than him so I feel like I owe it to my kids to make sure things are set for them.

thank you for the insights! I appreciate them!

Daisy

 

[DebbieB]

If you have a 401K account, you would have to transfer it to your husband as beneficiary unless he signs off on leaving it to the kids.

 

[Praying Colonel]

IMHO this is an example of where consulting a good estate-planning attorney in your state can be very beneficial. He or she can discuss your wishes and help you put together a plan for both probate and non-probate assets that accomplish this.

 

[Daisy&Max]

If you have a 401K account, you would have to transfer it to your husband as beneficiary unless he signs off on leaving it to the kids.

That's really interesting. I don't have a 401K but that's interesting to hear that it has to be in a spouses name.

 

[MarkBarbieri]

I agree with pearlieq. Leave the money to a trust. That's the safest plan.

 

[golfgal]

I'm divorced and remarried. I have a policy that names my parents as trustee for my children and I have another policy that goes to my current husband. The terms of my divorce decree require me to carry life insurance for my children's benefit until they reach the age of 18 or graduate from high school.

I would do this as well, except I would probably keep the life insurance until I die so I could leave something to the kids no matter what.

No I wasn't married before. I have my work insurance with my mother as the beneficiary but my other insurance I put in my kids' names. I never figured I would settle down so I figured if it was in the kids' names then my family would take care of it for them.

Thank you for the responses. I was thinking that it would be best to leave things the way they are but felt like maybe that sounds like I don't trust my SO. But I've had the kids longer than him so I feel like I owe it to my kids to make sure things are set for them.

thank you for the insights! I appreciate them!

Daisy

Actually, this isn't the best idea. How old are your kids? If something happens to them before they are 18 the money goes into a trust at the insurance company for them and at age 18 the money is theirs to do with as they wish. I would set your policies up to go into a trust that YOU set up with an attorney and determine how you want the funds distributed (to pay for college, weddings or whatever). The beneficiary of your policy would then whatever the name of your trust is (usually you do this in conjunction with a will). I would do this with all of your policies-even the one with your mom listed as she has no legal requirement to give that to your kids either. Then, if you want, she can be named trustee and have discretionary authority over the funds in the trust but still would have to abide by your wishes as to how the bulk of the money is distributed.

I would then get another policy naming your new SO if you wish.

 

[PatsMom]

I agree with pearlieq. Leave the money to a trust. That's the safest plan.

I have to agree with MarkBarbieri and Pearlieq. When children are involved, it is best to have a living trust to make sure your wishes are carried out and the money is properly allocated for the care of you children.

 

[Daisy&Max]

To be really honest I have never even thought about a trust or a living will. I have such wonderful support with from my family and it has always been an open discussion of what would happen to my kids if something happened to me. But thinking about it, if I am bringing someone else into our lives I should probably look into a trust and a will.

Thank you again for not only answering my question but giving me some other food for thought. I appreciate it.

Daisy

 

[PatsMom]

To be really honest I have never even thought about a trust or a living will. I have such wonderful support with from my family and it has always been an open discussion of what would happen to my kids if something happened to me. But thinking about it, if I am bringing someone else into our lives I should probably look into a trust and a will.

Thank you again for not only answering my question but giving me some other food for thought. I appreciate it.

Daisy

If you do not have a will, get one as quickly as possible. The financial things might sort themselves out with probate and courts eventually but a will does something extremely important for a parent - it specifies who you want to serve as guardian of your children. No matter how many conversations you might have had with your family, they do not exist legally unless they are expressed in your will.

 

[minkydog]

Our son Christian is severly mentally handicapped. As such, he CANNOT inherit money or property or he will lose whatever govt benefits he is receiving--the govt would make him spend down the inheritance. And a lot of his services are contingent upon him having Medicaid(which he has now.) Losing that would mean losing lots of other things.

We consulted an estate attorney and she recommended that the easiest and quickest way to make sure he is taken care of after we die is to establish a Special Needs Trust in his name and make him the second beneficiary of all our life insurance, after ourselves. The line has to say "Special Needs Trust for Christian Thomas __________" in order to qualify him.

We have chosen to do just that. Christian takes the life insurance, stocks, investments,etc. My other two kids will get the house and a minor portion of the investments and cash. Why? Because they both have the ability to make their way in the world. Christian can't. We want our older kids to be unencumbered by his financial upkeep, or God forbid, be forced to move him into their homes because there's not enough money to support him. Christian is very healthy, although he has the mind of a 1yo. He could potentially outlive us all.

 

[golfgal]

If you do not have a will, get one as quickly as possible. The financial things might sort themselves out with probate and courts eventually but a will does something extremely important for a parent - it specifies who you want to serve as guardian of your children. No matter how many conversations you might have had with your family, they do not exist legally unless they are expressed in your will.

Technically a will cannot distribute your money, you need a trust for that and any beneficiary information on a life insurance policy or retirement account, etc. will supersede anything that is in a will or trust so it is imperative that those match. Also, why go through probate if you don't have to, a trust can take care of that for you. Probate can be expensive, why spend the extra money??

 

[Dan Murphy]

As golfgal said above....an attorney, a will and a trust, all vitally necessary for anyone, especially with minor children.

As to a 401(k), not only as Debbie said above, but without a sign off from your then husband, the 401(k) automatically makes him the 100% beneficiary the moment you are married, regardless any previous arrangements. He must sign off, if you want him not to be 100% beneficiary, after your marriage.

(not to be taken as financial nor legal advice)

 

[livie1205]

my dh and I have both been married before and have other kids and one together.We both have it where we get the bulk of the insurance for each other...the kids have a small sep school/savings fund...reasons are...
1. we are married to each other,kids will grow up and have their own familys (we hope)2. we have a home that will have to be paid off and 3. his retirement can only go to me first then the kids if I am not here.4. we KNOW that the other would take care of all the kids with no problem but we both were raised to think it goes husband/wife ,kids ....then everyone else.
In the case I am not here the kids (all 3) will get everything together.We made the choice for me to be a SAHM so we had to make sure that I was provided for well enough to pay off home (so kids have a home) and to keep me going until I have a way to support myself and the kids on my own,also without my dh we would loose our great health care and I would have to pay for that also.
I see all the time where people are complaining about their parents leaving their stuff to spouses or something instead of their GROWN kids and it is crazy..if your a adult on your own do not expect your parents to save all their money just so they can leave it to you! Its their money and if they want to leave it to their 10th wife/husband so be it lol ITS THEIRS..