Finding a simple way to set up guardian for kids death benefit proceeds

[yorkriver1]

Best to arrange this prior to death rather than after.
Anyone have a simple process for them to set up the intent of guardianship, mainly single parents, if the other parent is not in custody or responsible (never married) and for couples, who may not consider what would happen if they were both deceased in an accident.
Some will say they can't afford an attorney or just put it off.
When a. the employer has not required employees to name a beneficiary on group life
b. on idividual policies with a client who is not going to easily set up a will or other formal guardianship arrangement

 

[Allen Trent]

Best to arrange this prior to death rather than after.
Anyone have a simple process for them to set up the intent of guardianship, mainly single parents, if the other parent is not in custody or responsible (never married) and for couples, who may not consider what would happen if they were both deceased in an accident.
Some will say they can't afford an attorney or just put it off.
When a. the employer has not required employees to name a beneficiary on group life
b. on idividual policies with a client who is not going to easily set up a will or other formal guardianship arrangement

if they dont have the funds or motivation to create a trust, name the children as the primary beneficiaries. This will assure the minor children receive the funds & probate court will have oversight to make sure the funds are annually accounted for & used for the kids.

not naming anyone(or listing "estate") on life insurance, group insurance or retirement funds assures the money has to go through the probate process where the creditors of the deceased will get paid first & anything left over after creditors & court costs will be split up according to the intestate laws of the state.

best if they have a trust, 2nd best if the carrier/custodian allows a beneficiary listing saying "X, guardian for the benefit of A, B, C children of insured/retiree". But I have zero problem naming minor children as beneficiaries of single person who has no trust

 

[yorkriver1]

if they dont have the funds or motivation to create a trust, name the children as the primary beneficiaries. This will assure the minor children receive the funds & probate court will have oversight to make sure the funds are annually accounted for & used for the kids.

not naming anyone(or listing "estate") on life insurance, group insurance or retirement funds assures the money has to go through the probate process where the creditors of the deceased will get paid first & anything left over after creditors & court costs will be split up according to the intestate laws of the state.

best if they have a trust, 2nd best if the carrier/custodian allows a beneficiary listing saying "X, guardian for the benefit of A, B, C children of insured/retiree". But I have zero problem naming minor children as beneficiaries of single person who has no trust

Thank you for this! I will check the beneficiary situation with my currently small but growing life clients. I see that the children as beneficiary would solidly establish their rights, if then it would facilitate a guardian after the fact who would be monitored.
I didn't follow completely, but in the one case in one of my employer groups where the person had named the fiance as beneficiary on voluntary life but the employer health plan's automatic $10K life had no beneficiary, the out of wedlock child was the probate deemed beneficiary once the guardian status one of the deceased's relatives was established.

 

[yorkriver1]

Adding to this, I do have one client with an adult child, disabled from birth. I am insisting they get a special needs trust set up. They keep asking about cost. A. I don't know-& don't want to discourage them--they can find the money, and B. it's the enormous cost to the other heir who will be the developmentally disabled child's guardian who will pay if they don't set up a trust. Not a lot of money, house, assets not massive, but $100K each parent, life insurance.

 

[Allen Trent]

Adding to this, I do have one client with an adult child, disabled from birth. I am insisting they get a special needs trust set up. They keep asking about cost. A. I don't know-& don't want to discourage them--they can find the money, and B. it's the enormous cost to the other heir who will be the developmentally disabled child's guardian who will pay if they don't set up a trust. Not a lot of money, house, assets not massive, but $100K each parent, life insurance.

While a special needs trust is likely more ideal,there are existing pooled trusts that money can be left to & they handle the ongoing trust oversight, etc.i believe that avoids the cost of setting up a special needs trust & the work for the sibling to administer it after.

Search for a Pooled Trust Directory By State | Special Needs Alliance

 

[scagnt83]

While a special needs trust is likely more ideal,there are existing pooled trusts that money can be left to & they handle the ongoing trust oversight, etc.i believe that avoids the cost of setting up a special needs trust & the work for the sibling to administer it after.

Search for a Pooled Trust Directory By State | Special Needs Alliance

Nice to know. Great resource for agents. Thanks Allen!

 

[yorkriver1]

While a special needs trust is likely more ideal,there are existing pooled trusts that money can be left to & they handle the ongoing trust oversight, etc.i believe that avoids the cost of setting up a special needs trust & the work for the sibling to administer it after.

Search for a Pooled Trust Directory By State | Special Needs Alliance

Wow, this could be super helpful for one of my clients. The description on the website of the pooled trust for special needs is written as if the reader is an adult who has all their mental faculties but is disabled, not able to work and waiting for a settlement of some kind. It could also apply to a family for their developmentally challenged child, after the parents pass away, the situation I encounter most often. This type of trust could be easier for their other adult child/guardian to manage, and not have the legal costs of setting up a trust.

 

[bmarsh]

Also look into ABLE account for the disabled child

How is an ABLE account different than a special needs or pooled trust?
An ABLE Account will provide more choice and control for the beneficiary and family. Cost of establishing an account will likely be considerably less than either a Special Needs Trust (SNT) or Pooled Income Trust. With an ABLE account, account owners will have the ability to control their funds and, if circumstances change, still have other options available to them. Determining which option is the most appropriate will depend upon individual circumstances. For many families, the ABLE account will be a significant and viable option in addition to, rather than instead of, a Trust program. For more information, the webinar on ABLE Accounts and Special Needs Trusts is archived on our website along with its slides, transcript, and other resources, including the ABLE Account, Special Needs Trust, Pooled Trust Comparison Chart.

 

[Cornelius]

A Legaldshield membership cost about $25 a month. It includes a Will and Powers of Attorney done with the assistance of a law firm.

Something to consider is if a financial guardian is appointed where will funds be distributed?

If funds are comingled with a personal account what happens if a judgement is attached to the account?

 

[NewbieNewbie]

Also look into ABLE account for the disabled child

How is an ABLE account different than a special needs or pooled trust?
An ABLE Account will provide more choice and control for the beneficiary and family. Cost of establishing an account will likely be considerably less than either a Special Needs Trust (SNT) or Pooled Income Trust. With an ABLE account, account owners will have the ability to control their funds and, if circumstances change, still have other options available to them. Determining which option is the most appropriate will depend upon individual circumstances. For many families, the ABLE account will be a significant and viable option in addition to, rather than instead of, a Trust program. For more information, the webinar on ABLE Accounts and Special Needs Trusts is archived on our website along with its slides, transcript, and other resources, including the ABLE Account, Special Needs Trust, Pooled Trust Comparison Chart.

This is good stuff. Thanks.