Legal Question in Wills and Trusts in California

If I designate my minor child as the beneficiary to my company sponsored 401K plan and Life Insurance, what happens to the funds/proceeds if i die before the child is 18 years of age?

Asked on 9/19/13, 2:04 pm

5 Answers from Attorneys

Jennifer Rouse Meissner Joseph & Palley

A guardianship of the estate would have to be established before the funds can be transferred. The guardian of the estate would be required to account on a regular basis with the court how the funds are handled and be limited on the distribution of the funds.

Another option is to establish a trust and have the trust named as the beneficiary on those accounts.

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Answered on 9/19/13, 2:13 pm

Michele Cusack Pollak & Cusack

Or, you can name a custodian (under the California Transfer to MInors Act) on the beneficiary form.

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Answered on 9/19/13, 2:21 pm
Victor Waid Law Office of Victor Waid

I agree with Jennifer Rouse in answer to your question about the establishment of a guardianship to receive the funds for the child's benefit and for annual accountings by the guardian to the court re the management of the funds on behalf of the child.

Also her suggestion is well taken about the establisment of a trust with the trust to receive the funds as thenamed beneficiary as an alternative to the guardian ad litem proceeding.

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Answered on 9/19/13, 2:25 pm
Phillip D. Wheeler, Esq. Phillip D. Wheeler, Attorney At Law

You need a guardianship of the estate.

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Answered on 9/19/13, 5:39 pm
William Christian Rodi Pollock

I agree that the simplest approach is to designate the beneficiary in the form of a Uniform Gift to Minors transfer. This would be done by naming the child as the beneficiary, but providing in the beneficiary designation language that says: "provided, however, that if the beneficiary is under the age of 18, the property will be transferred to X as custodian for (name of minor child) under the California Unform Transfers to Minors Act ( or the equivalent law of the applicable jurisdiction). No bond or blocked account will be required with respect to any such payment.

This is the easy way. If you are talking about substantial amounts, a trust might be considered, but this requires filing trust tax returns, accountings, paying a trustee, etc.

A guardianship of the estate is to be avoided at all costs. It's expensive , infelxible and time consuming. Don't let it happen.

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Answered on 9/19/13, 5:59 pm

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