I typically don’t recommend that clients name their trust as beneficiary of a child’s life insurance policy.
If the parents die before the child, the parents’ trust will have already been distributed and will cease to exist as an ongoing legal entity. Therefore, The trustcannot receive the proceeds. And proving to a life insurance company that the trust no longer exists can be administratively burdensome.
I generally recommend either:
- Naming themselves as the current beneficiary/ies (if the purpose is to provide funds in the unlikely event their child dies first); or
- Transferring ownership and beneficiary rights to the child if the intent is for the policy to serve the child’s own financial or family needs. (Assuming the child is an adult)
Husband and Wife are EP Clients Planning to Marry or Already Married and Want a Pre/Post Nuptial Agreement
Husband and Wife Clients are Divorcing
Below are some responses from the Virginia Bar Ethics Hotline
The inquiry above was related to Galazara
The inquiry below was also related to Galazara
