Ownership and Beneficiary Guide: Personal Policies for Family Protection
As promised in Tuesday's blog post, the following is the opening section of our Ownership and Beneficiary Guide, dealing with personal policies for family protection. The other sections of the Guide dealing with other typical situations will be published over the next few weeks. In the meantime, if you wish to receive a copy of the complete Guide, please send me an e-mail addressed to bob@provada.com.
Role |
Who Should Fill it |
Observations |
|---|---|---|
| Owner | Insured | In most situations, it is neither necessary nor desirable to name a third party as owner, not even a living trust |
If There Is a Living Trust |
||
| Primary Beneficiary | [name(s) of current trustee(s)], or their Successors, Trustee(s) of the [name of trust], dated [date of trust] | Generally, it is considered advisable to name the living trust as beneficiary, but if the insured wishes to name his or her spouse as primary beneficiary and the living trust as contingent beneficiary, that is acceptable |
| Contingent Beneficiary | Estate of Insured | If the spouse is named as primary beneficiary, then the living trust would be named here |
If Married and There Is NO Living Trust |
||
| Primary Beneficiary | Spouse of Insured | In special situation, a different beneficiary could be named, but beward of community property issues in community property states |
| Contingent Beneficiary | Children of insured in equal shares per stirpes; provided, however, if any beneficiary is under age [see observation], that beneficiary's share shall be paid to [name of responsible adult], as Custodian for that beneficiary until age [same as above] under the [applicable state] Uniform Transfers [or Gifts] to Minors Act; Successor Custodian: [name of another responsible adult] | The individuals named as Custodian and Successor Custodian would normally be the same persons who would be named as Trustee and Successor Trustee under a Living Trust. The age to which distribution can be deferred differs from state to state and should be checked under the applicable state law, which can be Googled. It is recommended in most cases that it be as late as possible, such as age 25 if in California for testamentary transfers. Most states have adopted the Uniform Transfers to Minors Act, but some states may still have only the Uniform Gifts Act |
If a Single Parent and There Is NO Living Trust |
||
| Beneficiary | The above would be the primary beneficiary and the estate of the insured the contingent beneficiary | In all of these situation, if all beneficiaries are adults, they can be named without a Custodian |
Bob Burton LLB CLU ChFC AEP, Director of Advanced Planning
415-369-9990, x116 -- bob@provada.com
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