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Anyone have carrier favorite beneficiary change form that permits an UTMA beneficiary to be listed even if an UTMA account wont be established until needed to receive the death claim for minors as beneficiary.
This is coming up as an agent was told by a carrier that a 10 year old child can't be a beneficiary (I believe they are wrong. I think they mean a claim payment cant be paid to a minor & court will oversee the funds until the minor is of age & a guardian will be responsible to manage money & report to court each year).
The carrier CS department instead suggested just naming a friend or sibling of the adult single insured/owner of policy. I told the agent that while that person could indeed follow through & take care of the kids, they would have no legal obligation to do so, could lose the money to a civil lawsuit, divorce, bankruptcy or spend it however they wanted because they were named as the beneficiary directly & no stings attached. Even if they did follow through to take care of the deceased persons children, they would expose themselves to possible gift taxes. All the possible bad scenarios could be avoided by naming the minor children (court would provide oversight of money while minors, or ideally a living trust if the person would have one to name as beneficiary.
Just wondering which carriers might have an UTMA-Guardian type option to mark so that the minor children can be named but at the same time mark a box to name a guardian or someone that would have to handle the death claim account for the minor children, etc. Or do some carriers allow FBO-for benefit of listing
I am told carriers are nervous as they need to study the UTMA laws of each state a claimant lives in at the time of a claim payment, etc.
This is coming up as an agent was told by a carrier that a 10 year old child can't be a beneficiary (I believe they are wrong. I think they mean a claim payment cant be paid to a minor & court will oversee the funds until the minor is of age & a guardian will be responsible to manage money & report to court each year).
The carrier CS department instead suggested just naming a friend or sibling of the adult single insured/owner of policy. I told the agent that while that person could indeed follow through & take care of the kids, they would have no legal obligation to do so, could lose the money to a civil lawsuit, divorce, bankruptcy or spend it however they wanted because they were named as the beneficiary directly & no stings attached. Even if they did follow through to take care of the deceased persons children, they would expose themselves to possible gift taxes. All the possible bad scenarios could be avoided by naming the minor children (court would provide oversight of money while minors, or ideally a living trust if the person would have one to name as beneficiary.
Just wondering which carriers might have an UTMA-Guardian type option to mark so that the minor children can be named but at the same time mark a box to name a guardian or someone that would have to handle the death claim account for the minor children, etc. Or do some carriers allow FBO-for benefit of listing
I am told carriers are nervous as they need to study the UTMA laws of each state a claimant lives in at the time of a claim payment, etc.
