Piggyback to Life Insurance Question

You should talk to a lawyer. What my lawyer suggested was to set up a trust fund, which a neutral party can give my child funds from it for necessary expenses (immediate funeral expenses, clothes, college) until age 24, and then at age 24, he gets control of the fund. The person who would get custody of my kids is NOT the same person who will oversee the trust.

Once the trust was set up, I made the trust the beneficiary of all insurance and bank accounts, so that everything goes into that.

So in your case, even though your ex will get custody of the child, you could put a different trusted family member (sibling, or even a trusted friend) in charge of the trust so that they control how the money is spent, not your ex.

M.

I've not read the other question. Here's what I will tell you from my experience and those I've seen die too young.

1. If you have children under legal age - you need a policy that will cover them until they are of age - and you need to assign an executor or executrix (this MUST be someone you trust IMPLICITLY to take of your child/ren and their financial well-being until they are of legal age. This person will take care of the financial means. You CAN set it up for this person to be both - guardian and executor/trix. I would not set it up that way. But that's me).

2. You need a plan - you HAVE to have a "Hit by the bus" plan - I know it sucks but that's life. If your son's biological father is an A$$hole? What does your court order say for custody? Will your son go live with his daddy or is there another person appointed?

I have a girlfriend, she's divorced with two boys - I take care of these boys while she is out of town working. They have space at my house. She has full legal custody of the children. Their dad has visitation ONLY with 4 weeks out of the year where they have to go to HIS PARENTS house to stay and he visits. IF she were to die tomorrow? I get custody/guardianship of the boys. They know this and their biological dad knows this. You TALK with the person you want to care for your kids. They need to know your wishes. There is another trusted friend who takes care of the financial side. We all sat together and discussed this. YOU need to do this as well.

3. You need to have your wishes clearly delineated - get a lawyer - get a will. I don't want to be buried, I want my body donated to science and then cremated when done. You need to figure out how you want yours handled. You stated you wanted to buy a burial plot. So you want to be buried. Okay. Get a document together that states your wishes, desires, etc. Get a living will in place as well so that if there is an accident and you are NOT capable of making decisions - someone will make them for you AT THAT TIME...and also state care for your son.

This would NOT be your spouses responsibility. This would be YOUR responsibility. You really NEED to get it done.

Make sure you have a life insurance policy that breaks out who gets what. For example. I have several policies - the beneficiaries are:

My oldest son
My youngest son
My sister
My dad
My best friend

It's split equally among them. One policy is specifically for my husband. My policy through work? It takes care of any debt I might have, my daughter (who will be 29 this year) and just any costs that are incurred with my death.

You can do this yourself. But you MUST have it notarized to make it legal. You can go to LegalZoom. com and do it:
http://www.legalzoom.com/legal-wills/wills-overview.html

Don't let this slip through the cracks. If your son is six and you died next week? Who would take care of him? Your SOB of an ex? Do you REALLY want that to happen? Do you REALLY want him to be able to spend the money you set aside for your son??? If the answer is no to ANY of those questions - you MUST get a will in place.

Tyler and I have policy on each of us and one for each of our boys.

We have our wills updated every 3 to 5 years. We just had it done last year after Tyler's dad died unexpectedly.

Our final wishes are clearly stated. We have one family member who will take care of the boys should Tyler and I die at the same time and another person who is responsible for the financial end of things. There is a stipend to be paid to the person who is noted to take care of our children every month as adding 4 kids to the mix is not cheap.

Since we moved from California to Georgia, we talked to family so we could keep our boys in the same location they are now.

Our boys know our wishes. Since my husband is a retired military member, his final expenses are almost taken care of and he will be buried at a national cemetery. As his wife throughout his military career, I can be buried next to him as well.

We have living wills in place too. We did those after his father died last year. While he was found dead in the house by my mother-in-law, had anyone been able to work on him, he might not have had any quality of life. We discussed it when we updated and got a living will in place at the same time.

Our life insurance policies are hefty. We have 4 kids and a house to take care of. Get a policy you can afford that will take care of your son until he's considered an adult.

The policies on our boys are $25K each and whole life. We got them when they were born so they were and are still "cheap".

Tyler is in the Reserves and is has a full time contractor job and has a policy through them as well. I think they take out $5 a paycheck for it. It's his base salary multiplied 5 times.

Do you have family near you? Someone you trust to take care of your son? His dad is still alive, do you share custody with him? Would your son want to go live with him? Is he involved in his son's life? That would be pretty traumatic, losing mom and then going to live with someone you barely know.

I guess you have a lot of thinking, planning and writing to do. I know for us it was overwhelming. It can be. The peace of mind you have when it's done? It's great!

I love the idea of checking with your work to see if they have a legal service!

You need more than just a life insurance policy. You also need a will that specifies your wishes to the letter. Get an attorney and speak with them about all of your concerns. They can draft a will that ensures that your funeral expenses are paid and that the rest of the money be put in trust for your child.

I just want add my situation was very different from yours. I had four kids, two very young, 5 and 7, and two older 16 and 18. It is complicated to protect them all. No law protected the 18 year old and little protected the 16 year old. Our decree requires my ex to pay for private schools and college. If I died the decree is no longer enforceable. I had to have something in place to at least protect my daughter's last year of high school and give her a roof over her head.

Clearly your trust would look different but a trust attorney is where you need to start.
Original
A few months after my divorce my ex made a comment that compelled me to get a trust for my kids. Where will Christine live if you die? Um, she will live in her house, my house. This idiot actually thought that since my kids inherit the house and he inherits the kids he would by proxy get my home and kick our older kids out because they have grown to really not like their father. Of course 10 years later all four hate him but I digress.

I had enough life insurance to pay off the house and 200k above that. It directed my brother, attorney in fact, to fight for custody of my kids to the extent my decree spelled out. If he was successful he would have taken custody of the kids. Regardless he would also be trustee of the estate.

Generally you don't want whoever gets custody to also be the trustee. It becomes too much like child support where the person with custody thinks they should just take X amount each month who cares if the expenses are far less. It would drain the trust too quickly.

Anyway, the house would belong to all four of the kids and be sold when the last kid turned 22. The excess money was there for the minor kids.

Anyway, you need to find a good attorney that deals with trusts. I came in with protect my assets from my ex and he, through questions, found a mess of stuff I missed. In the end I had a document that protected my children's money because as it stands my ex would have had control of the house if I had died and the kids would have had no protection from him.

You're confusing 2 different things but both come into play when you die.

Your life insurance is paid out to whomever you list as your beneficiary (ies). They are free to spend it as they wish UNLESS they are a minor. Don't assume that your aunt will pay for your funeral or help out your kids until they are adults.

A will or trust determines what happens to not only your money, but property and possessions after you die.

Speak to a financial planner to get advice regarding your details specifically. Good luck.

Your son needs to be the beneficiary, and then you need a will naming an executor. See if your work has a lawyer service. We are setting up our trust through a discounted service we get through hubby's work.

We have ours set up so that the kids can withdrawal money for educational expenses, but the money remains in trust until 26.

You can have your child's guardian as the one who gets the life insurance. We have it set up that my husband and I are each other's beneficiaries and the kids are secondary beneficiaries. We will also have most of the money put into a trust so that the kids can not have access to it and the guardian as the trustee so that they can have access to help pay living expenses for our kids. We have a lot of insurance between the both of us, so we thought a trust was the best way to go so our kids aren't walking around with sudden wealth at 18.

I also wanted to suggest getting something outside of work while you are young. Most jobs when you leave the life insurance is terminated. The older you get the more expensive insurance gets. You don't need much, just funeral costs and some extra to pay any outstanding debt.

You should choose guardians for you son in case you die.
That person ( or anyone else you choose) can also be in charge financially of what you leave him in your will, until he is 18, or 21, or whatever age you decide.
Life insurance and other assets would be left to him normally!
You can also appoint someone to be executor of your will.

Updated

You should choose guardians for you son in case you die.
That person ( or anyone else you choose) can also be in charge financially of what you leave him in your will, until he is 18, or 21, or whatever age you decide.
Life insurance and other assets would be left to him normally!
You can also appoint someone to be executor of your will.