When you start a life insurance policy, you want to be sure that your kids are taken care of in the event that you pass away before they turn eighteen. Whether your spouse or ex-spouse remains their guardian at that time, a family law attorney should still be involved in this legal process. Here are some reasons why.
Underage Beneficiaries Cannot Receive Payments
Despite the fact that you intend for your children to receive the payouts from the life insurance, in most states they cannot be the recipients until they turn eighteen. This means that the life insurance company would hold the benefits in trust until one of two things happen. Either your children's guardian can sue the insurance company to get the benefits, or your children would have to wait until their eighteenth birthdays to claim the benefits. Neither of those situations fit with your good intentions.
Waiting until the Kids Are Eighteen
It is not the best option, especially if you pass away while your children are still very young. However, the money that they receive when they are of age could pay for college, which means you would be helping your children get a good start in life even though you would have been gone for years by then. When that happens, a family lawyer would get involved to make sure the children receive what they expected to receive, and that your spouse or ex-spouse does not attempt to sue the children for a piece of the pie.
Assigning Benefits to an Ex-Spouse in Trust
You could assign your life insurance benefits to an ex-spouse in a trust for the kids. Then your ex can make sure the benefits are spent on the kids after you pass away. If you involve the family lawyer, then you can sign an affidavit attesting to specific requirements for the life insurance money if you are worried about it being mishandled by your ex.
Hiring a Family Law Attorney to Act as Financial Guardian over the Benefits
If you have an established working relationship with your family lawyer, you can request that he/she act as financial guardian over the life insurance benefits for the children. This actually gives you more power and control over how the benefits are parceled out after your death. It also gives you more control over the money when you are no longer present, something which puts a lot of people at ease.
For more information, contact a firm such as The Healy Law Firm.