QUESTION
life insurance minor beneficiaries and divorce
Asked on Mar 07th, 2014 on Estate Planning - California
More details to this question:
I am divorced and want to have my life insurance proceeds used to support my children. I have a person who would be a trustee but I was told if I name my minor children as beneficiaries my ex-wife would get the proceeds. Do I need a life insurance trust with a friend as the trustee to manage the money? Is this a special trust or just a regular trust fund?
1 ANSWER
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If you expect the value of all your assets to be under $5,000,000 (including the face value of the life insurance policy) when you die, you probably will not need an irrevocable life insurance trust. You might want to do a revocable trust, however, and name that trust as the beneficiary of your life insurance policy. You can be trustee of that trust, and it is not a separate taxpayer (no income tax returns required) until you die. If you are required to provide support under your divorce decree, you should check with your divorce lawyer on whether this complies with what you have been ordered to do.
Answered on Mar 08th, 2014 at 4:55 PM