Naming kids on 401k

[adventure_woman]

We have a will but do not have a trust for our 2 kids. On my DH's 401k, what/who should we list as the beneficiary after me? We don't list them do we?

(I know we should talk to a lawyer, we are waiting to hear back from the people that did our will, but we really need to hand paperwork in ASAP).

 

[GAGirlInVA]

I think DH has all our children listed equally after me.

 

[imsayin]

I would (have) definitely list them as second beneficiaries.

 

[Sadie22]

It's a special situation when the children are minors. Minors usually cannot receive more than a nominal sum directly. Consult your attorney and the 401(k) administrator for the wording required so that an adult guardian can receive funds on behalf of minors.

 

[lost*in*cyberspace]

Never, ever list a minor as a beneficiary! An adult will have to be appointed by the court to manage the money. You need to leave the money to a trust instead of minors. Consult your attorney.

 

[Jeff_G]

If your minor children are named as beneficiaries the 401K plan (and life insurance policies) will not issue a check until a guardian is appointed by the courts. Assuming you have listed a guardian in your will this will take a few weeks perhaps a month or more.

Your guardian then manages the money for the benefit of the children until they become 18 at which point all the money is turned over.

Your will can specify that a portion of the money be distributed at intervals, example at age 18 give them 20%, age 25 Give them 50% and Age 30 give them the rest... Etc. The guardian and or executor of the will should honor the conditions of the will.

Another option is to create a legal trust with a trust administrator and name the trust as beneficiary. The you can then specify the trust is to care for the needs of the minor children and pay out the funds when the kids turn certain ages.

You need to get a lawyer to draw up a trust and ensure everything will be done correctly. Also a trust administrator will likely charge a fee for their services.

Personally I have named a trusted family member as executor and guardian of my children in my will and I have named my children as secondary beneficiaries on my 401k.


More info:
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/estate/ProvideforFamily/MinorBenes.jsf