# Life insurance beneficiary and kids



## BeachGuy (Jul 6, 2011)

One of the unresolved issues in my ongoing divorce is that my wife and her lawyer have in the papers that I keep her as full beneficiary on my life insurance, even after the kids are grown and gone. I have a problem with that. One, she would get the cash, deposit it in the bank and then just forget about it and go on writing checks and paying bills and what-not until 3 or 4 years later when it would all be gone. No investing or college funds or anything. Second problem is what if I get married again or something?

I suggested naming the children as beneficiary with a trust to manage it until they're 18 or 21. Then after that I can name whoever I choose as full beneficiary. My youngest won't be 21 for 10 more years.

Thoughts? What have others done?


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## happy as a clam (Jan 5, 2014)

No WAY would I leave her as the beneficiary! That's ridiculous for them to insist. Let's face it, what would prevent her (or any other spouse in a similar situation) from "offing" you somehow to collect the benefit. People disappear in "mysterious accidents" everyday. I'm not saying that would happen; just using it to illustrate why it's unreasonable.

Your plan to name your children as beneficiaries with a trustee to manage the money is exactly how I handled it in my divorce.


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## PBear (Nov 16, 2010)

I'm with the two of you. Why should she benefit in the case of your death?

Who was going to be the benificiary of her policy?

C
_Posted via Mobile Device_


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## Married but Happy (Aug 13, 2013)

In my case, my child became the beneficiary via a trust until he was 18, after which I could do whatever I wanted. I also owned my wife's policy, and she owned mine, so we reassigned ownership so we'd control our own policies and premium payments thereafter.


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## SpinDaddy (Nov 12, 2012)

This is going to be a question for your lawyer (tax and financial planner as well perhaps) and if you don’t have one, stop – go no further until you do.

What should happen here is going to depend on the terms of the settlement and the jurisdiction you are in. Being that you list yourself as from a community property state, the arrangement they’ve proposed does sound curious. But there are a lot of factors that may or may not support such an arrangement.

A trust is not an extraordinary approach, it will come with certain additional costs (management fees), but it may be the better or only way to assure that the best interest of the children are looked after in the event of your untimely death and that your financial obligations there are provided for.


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## tulsy (Nov 30, 2012)

If you were to die before they are 18, she wouldn't be getting your child support so she actually would need the life insurance.

I went through the same thing with my ex-wife. I really didn't want her profiting from my death, but at the same time, I know that child support would end if I died. 

I don't pay for the policy anymore, she does. I'm too busy living my life to give a chit.


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## unbelievable (Aug 20, 2010)

I try to avoid giving women financial incentives for seeing me dead. I can give them enough reasons without throwing money into the mix.


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## happy as a clam (Jan 5, 2014)

Anyway, in my state (Ohio) the spouse as beneficiary is *automatically* revoked (next of kin such as children become beneficiaries regardless of who is named) once the divorce is final. Obviously the courts here realize that it's not a good idea to leave your ex-spouse as a beneficiary.

I realize if you included it in the divorce decree language it would stand, but it's just a bad idea all the way around.


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## tulsy (Nov 30, 2012)

unbelievable said:


> I try to avoid giving women financial incentives for seeing me dead. I can give them enough reasons without throwing money into the mix.


Kids changes all that.

If you are paying child support, chances are at least some of that is putting a roof over their heads and food in their bellies.


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## Hope1964 (Sep 26, 2011)

If the concern is to provide for minor children, put them as the beneficiaries with the money in trust to someone other than your ex, to be administered for them until they turn whatever age you decide (21 or whatever). I'd be specifying in no uncertain terms that the ex cannot use ANY of the money herself, but has to have everything approved by the trustee.


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## unbelievable (Aug 20, 2010)

I the obligation is to the kids, make them the beneficiaries and appoint a blood relative or an attorney to administer the trust.


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## EleGirl (Dec 3, 2011)

It’s not unusual for the spouse paying child support to carry a life insurance policy that pays to the one getting the child support. It’s about replacing the child support.

When I divorced from my son’s father what we did was that each of us was required to carry insurance of a specified amount to cover child care if either of us died. If your stbxw dies, you will have custody and the children. So you would be in need of the extra income that she would have provided had she lived. So I suggest that you insist that she have a policy that pays to you as well.

You could always get a smaller policy that only covers child support payments until your children are 18. Then keep the one you have now as the one that you put in a fun for your children.

The idea that you carry a policy for the rest of your life that pays out to your stbx wife is ridiculous. If she continues to insist on this, ask that she do the same thing. That she carry one so that you profit from her demise. See how fast she backs down on her request.


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## BeachGuy (Jul 6, 2011)

> People disappear in "mysterious accidents" everyday. I'm not saying that would happen; just using it to illustrate why it's unreasonable.


Lol…if she were going to do that, it would’ve happened already!


> Who was going to be the benificiary of her policy?


The only life insurance on her is what I get from my job, and it’s not a bunch. Enough to help me provide for after-school care for the kids and such if anything ever happened. But that was really for when they were younger. I just kept the coverage because it’s so cheap through work.


> I try to avoid giving women financial incentives for seeing me dead.


To bad that choice isn’t real world. If the court orders it, you have little choice.


> the spouse as beneficiary is automatically revoked


Could be the case for me too…I don’t know. I do know once I put her as beneficiary 17 years ago, I cannot change it without her signature. That’s the insurance carriers policy. The funny thing is she only asked for a mere pittance in child support but asked for a ton in alimony. Of course that’s because she knows c/s will end when the kids turn 18.


> It’s not unusual for the spouse paying child support to carry a life insurance policy that pays to the one getting the child support. It’s about replacing the child support.


Exactly.



> So you would be in need of the extra income that she would have provided had she lived.


She hasn’t worked in 16 years so there is no income to replace. I wish there were.


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## Malpheous (May 3, 2013)

I wouldn't name her. I'd agree to name the children for a set amount per child. Each on their own policy. Any payout, God forbid, would then be deposited into a joint account with the minor child and surviving parent listed. Tax free. They used to call it a gift act for minors account. Not sure if they still do. Key Bank calls it a Key4Kids account. The parent can only legally spend the money in direct care of the minor child. 

Go by your bank. Inquire about this. Then offer it in reply to your ex's lawyer.


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## helolover (Aug 24, 2012)

I agreed to keep my X as a beneficiary as long as I had a child support obligation. In my case, 6.5 more years. I only cover the amount of child support over the 6.5 years. The rest goes to a trust for my daughter as does any other life insurance proceeds. The trustee will pay out as required and over the lifetime of my daughter. 

I wouldn't agree to your wife being covered by your life insurance eternally. Perhaps a set time (1 year) until she gets her crap together.


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## honcho (Oct 5, 2013)

With minor children or in the case of long term marriages and alimony as a factor it is not unusual that the spouse be kept as beneficiary of policies. Her lawyer asking for it while is sounds ridiculous, well what is the worst that can happen, you say no. 

Having it set up to either go into a trust for children or something along those lines is common but leaving her as beneficiary to the end of time is unnecessary and the court wouldn’t enforce that either if they refuse to budge off the offer.


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