Legal Question in Wills and Trusts in New York
Who controls money when a minor is beneficiary?
I would like to know if you designate your child as beneficiary on your life insurance policy, in the event of your death and that child is still a minor, who is in control of the money? In this case an ex-spouse would become custodial parent of the child so would he than be in control of the money? How do you ensure the monies are used solely for the childs up-bringing?
2 Answers from Attorneys
Re: Who controls money when a minor is beneficiary?
Q. In the event of your death and that child is still a minor, who is in control of the money?
A. The child's custodial parent.
Q. In this case an ex-spouse would become custodial parent of the child so would he than be in control of the money?
A. Yes.
Q. How do you ensure the monies are used solely for the childs up-bringing?
A. Create a testamentary trust in the will directing a close friend to be the trustee. Change the beneficiary in the life insurance policy to be the trustee under the terms and conditions of your will.
Mike.
Re: Who controls money when a minor is beneficiary?
The guardian would control the money,presumably the surviving parent.
The insurance policy provides optional forms of payment to protect an infant.
A trust can be designated as the beneficiary and in that case a trustee of your choosing would control the money for purposes and for the lenghth of time you specify.
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