What Should I Consider When Naming a Child as Beneficiary?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 01 December 2019
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Naming a child as beneficiary to a last will and testament or one or more life insurance policies is a task that requires careful consideration. This is especially true when the child in question is a minor. Even when the child is an adult, issues such as the level of maturity and responsibility exhibited by that son or daughter, as well as the reasons for naming the child as beneficiary, must be taken into consideratoin. By understanding the laws that apply in the jurisdiction where you reside, it is possible to set arrangements that will accomplish the goals you have in mind and make sure your child or children are provided for properly.

Parents of an adult child or children can often make a determination on the child as beneficiary based on both the needs and the ability of that child to manage money to best advantage. For example, the decision may rest in the fact that one child makes less money than the other children, but manages what is made in a satisfactory manner. At other times, the focus may be on some special wishes that the parents have regarding how the assets will be used, and trust one child in particular to use the money for those purposes. Making sure the child who is named as the beneficiary is trustworthy and likely to follow those instructions is very important.


Another aspect of naming a child as beneficiary is to consider naming co-beneficiaries when there are several children in the family. This can be done by naming each child personally as a beneficiary, specifying how the proceeds are to be divided, such as a percentage for each one, or even a specific amount allocated according to a set schedule. Keep in mind this process calls for updating the instructions with both the will and any insurance policies to make sure any children born or adopted after the document is drafted are included.

Naming a minor child as beneficiary can be done, provided additional strategies are put in place to protect the interests of the child. This means possibly naming the surviving parent as the primary beneficiary with a provision that the funds are used expressly for the care of the child. When the child reaches adulthood, the remainder of the proceeds can then be turned over directly to that child. Another approach is to establish a trust for the child and name an administrator who can manage the funds until the child reaches adulthood. Both insurance and legal professionals can outline the pros and cons of each of these arrangements, and make it possible to name your child as beneficiary with full confidence he or she will get the benefit of your efforts.


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