my ex passed away and had our 14 year old son named as benef

Message Author
ampm-bookmark
delicious-small Add to delicious
yahoomyweb-small Add to YahooMyWeb
blinklist-small Add to BlinkList
PostPosted: Wed May 27, 2009 1:15 am   Post subject: my ex passed away and had our 14 year old son named as benef  

My ex-husband passed away about a month ago. We just found out that my ex's dad was beneficiary with our 14 year old son as 2nd on the policy. My ex's dad passed away 2 years ago and that leaves our son as beneficiary on the policy (which is a large policy) we live in Illinois. What are the laws? What do I need to do?

bjamm1972
New member
Leave a quick message



Joined: 27 May 2009
Posts: 13


7.29 Dollars($)

PostPosted: Wed May 27, 2009 5:17 am   Post subject:   

(215 ILCS 5/229) (from Ch. 73, par. 841) Illinois Law States:



Quote:
If the policy shall be in force at the death of the insured, the proceeds thereof shall be payable to the named beneficiary if living, but unless proof of claim in the manner and form required by the policy, accompanied by delivery of the policy for surrender, has been made by such beneficiary within fifteen days after the death of the insured, then upon the expiration of said fifteen days, or if the beneficiary is the estate of the insured, or is a minor, or is not legally qualified to give a valid release or dies before the insured, the company may pay to any person permitted by the policy.




Simply put, your minor son is the contingent beneficiary, but since the death of your ex-father in law occurred as well, your son "moves up" to primary beneficiary, so to speak. Since Illinois law appears to default to the insurance policy, is there any chance that you have it or can get your hands on it? In these cases, there are normally arrangements made in advance of the death(s), but this happens. There are all sorts of trust arrangements, and I would suggest that you ask the company to not make any payments just yet until you sort a few things out.



First, can you get the policy? Secondly, if not- it might not be a bad idea to see who the insurer was going to pay or if they were waiting for instructions from you. I'm going to get another forum expert in here to help you out as well.



Keep us informed as to what's going on, ok?



InsTeacher Cool
InsTeacher
Forum Expert
Leave a quick message

InsTeacher
Forum Expert

Joined: 13 Aug 2007
Posts: 1398

Location: Oregon, USA
127.26 Dollars($)

PostPosted: Wed May 27, 2009 6:07 am   Post subject:   

Bjamm, who is the guardian of the child? It seems that the insurer wouldn't pay directly to a minor.



By the way, Teacher, if the OP can't submit the policy document, what would be her chance then to receive the claim on behalf of her son?

JeremyHolter
Senior member
Leave a quick message

Jeremy Holter

Joined: 06 Jun 2007
Posts: 1185


210.40 Dollars($)

PostPosted: Wed May 27, 2009 10:23 am   Post subject:   

Sorry about your loss. Congratulations on your son's gain.



Simply contact the insurance company and they'll tell you what to do. Most likely, the'll be some claim paperwork to fill out and they'll want proof of death of both your ex and the primary beneficiary.



If a trust account has not been set up, this will have to be done. This is not a complicated thing and does not require an attorney or any special forms. The account is called an UTMA. You can control the money and it can be used for basically anything as long as the purpose is to benefit your son.

InsuranceExpert
Senior member
Leave a quick message



Joined: 05 Apr 2009
Posts: 662


142.73 Dollars($)

PostPosted: Wed May 27, 2009 12:08 pm   Post subject:   

This is an interesting thread.



A couple of things that jump out at me is the money belongs to the 14 years old.



This is good and bad.



Mom, of course, is the legal guardian of the PERSON, but she does not own the money.



I don't believe the Uniform Transfer to Minors Act (UTMA) is applicable for the payment of life insurance DEATH BENEFITS. I believe that is for GIFTS TO MINORS.



See THIS LINKY from State Farm.



The insurance company has a legal problem here. It would be my best educated guess the insurance company would hold those fund IN TRUST FOR the 14 year old until his age 18.



AND I would guess they would NOT release any funds to Mom or child WITHOUT a court order. Someone AND YES IT WOULD BE MOM needs to be appointed trustee for the minor child's property.



AND my next words are going to anger most all women but the 14 year old needs his own attorney to protect his interest. That won't happen. Mom will be appointed the minor's trustee and she will be able to do as she pleases with those funds.



Please don't take my words as harsh. I've seen women steal money from their minor children because they don't AGREE with who they "think" the money belongs to.



_________________

Gary Spicuzza, *SAFE

Copyright 1956.

No Rights Reserved.

*Self Appointed Financial Expert
GarySpicuzza
Forum Expert
Leave a quick message


Forum Expert

Joined: 03 Apr 2008
Posts: 965

Location: West Pasco County, FL
243.67 Dollars($)

PostPosted: Wed May 27, 2009 12:43 pm   Post subject:   

LOL Gary...I would say that anyone...a mother or a father might steal money from their child. Whether it was good old fashioned selfishness for self serving reasons...or in the case of my ex....just really bad financial decisions.



So maybe you should change that response to "parents" instead of women. Wink



_________________

I arise in the morning torn between a desire to improve the world and a desire to enjoy the world. This makes it hard to plan the day.

E. B. White
picklesandchampagne
New member
Leave a quick message



Joined: 20 May 2009
Posts: 18


10.19 Dollars($)

PostPosted: Wed May 27, 2009 2:35 pm   Post subject:   

Quote:
So maybe you should change that response to "parents" instead of women.


Good idea, it does goes both ways.

Sorry, please no hate mail.



Amended reply:



Please don't take my words as harsh. I've seen [PARENTS] steal money from their minor children because they don't AGREE with who they "think" the money belongs to.


_________________

Gary Spicuzza, *SAFE

Copyright 1956.

No Rights Reserved.

*Self Appointed Financial Expert
GarySpicuzza
Forum Expert
Leave a quick message


Forum Expert

Joined: 03 Apr 2008
Posts: 965

Location: West Pasco County, FL
243.67 Dollars($)

PostPosted: Wed May 27, 2009 6:00 pm   Post subject:   

thank you to all who replied...this is so confusing to me. ok, i am the guardian of our son, i also had full custody before my ex's death. i have contacted an attorney, who said i should set up a legal guardianship in court, incase the insurance(which is Prudential)company requires it. today, i was finally able to get the death certificate along with my ex father in law's death certificate to the coal mine in which my ex worked. since this was a group policy, it goes through the coal mine, they will expedite the information i have to Prudential. so, i guess i just have to wait to hear from the insurance company, but the employer is being very helpful. to make matters worse, there is a lawsuit for a large sum of money, my ex was about to settle for from workers comp when he broke his back at work, plus a 401k policy. i believe my son is entitled to 50% of that, is that correct? my ex was remarried about 1 year ago. i totally understand that some people would steal money, even from their own children. that is why i definatly want to do the right thing...according to the law. i just hope that my sons money does not get tied up in court for years. thanks for any help

bjamm1972
New member
Leave a quick message



Joined: 27 May 2009
Posts: 13


7.29 Dollars($)

PostPosted: Wed May 27, 2009 7:52 pm   Post subject:   

bjamm1972, thanks for coming back to your thread and providing more information.



The reason it seems confusing is because there are two separate types of "guardians."



One is the guardian of the PERSON. You're that GUARDIAN because you're Mom.



The other guardian is the guardian of the minor child's property. You're NOT that person just because you're the minor child's Mom with respect to the payment of life insurance death benefits.



This is what the attorney is talking about. Going to court and having you appointed as GUARDIAN (trustee) of the minor child's property (money).



Many times when we're working with young couples and setting up their Estate Plans is quite common for them to name one person as the guardian of the child because they are a great caretakers but may not be worth a damn with money. So they will name someone else as trustee of the minor's money.



_________________

Gary Spicuzza, *SAFE

Copyright 1956.

No Rights Reserved.

*Self Appointed Financial Expert
GarySpicuzza
Forum Expert
Leave a quick message


Forum Expert

Joined: 03 Apr 2008
Posts: 965

Location: West Pasco County, FL
243.67 Dollars($)

PostPosted: Thu May 28, 2009 12:16 am   Post subject:   

Quote:
I don't believe the Uniform Transfer to Minors Act (UTMA) is applicable for the payment of life insurance DEATH BENEFITS. I believe that is for GIFTS TO MINORS.



See THIS LINKY from State Farm.




Gary, I'm not sure what about that link leads you to believen that it would have to be an UGMA instead of an UTMA. Anything that can go into an UGMA can also go into an UTMA. The reverse is not true. I can't think of a single reason to use an UGMA over an UTMA.



Quote:
The insurance company has a legal problem here. It would be my best educated guess the insurance company would hold those fund IN TRUST FOR the 14 year old until his age 18.




The insurance company would like the money to be in a trust account at the insurance company so that they can earn fees on the money. However, I don't think that they have the ability to just hold onto the money into a trust. They can't just decide to name themself trustee. Instead, until the money is paid out, it will accumulate at interest.



Quote:
AND I would guess they would NOT release any funds to Mom or child WITHOUT a court order. Someone AND YES IT WOULD BE MOM needs to be appointed trustee for the minor child's property.




The reason that a trust account needs to be established is that a minor can't control their own bank account or investment account. If the insurance company sends a large check to a minor and an UTMA/UGMA account isn't established, the minor can't do anything with the proceeds. If the child is the rightful beneficiary, it won't take a court order to release the funds. The money won't be released to the mother. It will be released to the child.





Quote:
AND my next words are going to anger most all women but the 14 year old needs his own attorney to protect his interest. That won't happen. Mom will be appointed the minor's trustee and she will be able to do as she pleases with those funds.




Legally, mom, or whoever the trustee is, must use the money for the benefit of the child. However, there is no "UTMA Police". If the trustee uses the money for other purposes, the trustee will have to be sued.
InsuranceExpert
Senior member
Leave a quick message



Joined: 05 Apr 2009
Posts: 662


142.73 Dollars($)

PostPosted: Thu May 28, 2009 6:37 am   Post subject:   

I tend to agree with Expert. Since there is no monitoring body to oversee the activity of the trust, the trustees can actually misuse the money. But, itÂ’s not the problem with the young couple only. Another factor is the 'trust'. You may believe the particular person you have chosen would always prioritize the interest of your child, but people do change, don't they?



I'd like to learn the best way to set-up the trust for a kid so that I can sleep in peace at the nights.


_________________
Register Now to have your Insurance queries solved.
Deborah Pope
Guest







PostPosted: Thu May 28, 2009 10:46 am   Post subject:   

Hi bjamm1972,



Quote:
They can't just decide to name themself trustee.


So, I guess if the insurance company fails to be the 'trustee', then there's nothing to worry about. If the money should go to the child as the rightful beneficiary, then there's nothing much you could do about it. You might just need to wait till you're sure of the carrier's intentions.



Make sure that the money is being used for the benefit of the child in the end. And let us know if the carrier talks of any kinda fees. We all would be eagerly waiting to know what follows next..please do care to share with us..would you?



Steven
steven
Senior member
Leave a quick message

steven

Joined: 02 Feb 2006
Posts: 1546


215.89 Dollars($)

PostPosted: Thu May 28, 2009 11:27 am   Post subject:   

Insurance Expert I don't believe we're on the same page.



If Mom can simply go to the bank and set up a UTMA account, then the insurance company may as well just pay the money to her since she would be the one who actually controls the account.



What you're argueing ( I think?) is that Mom can simply appoint herself as GUARDIAN of another person's money.



I'll bet my SAFE designation the insurance company isn't going to pay out any money where a minor is the beneficiary without a court order.



Mom could be a drug addict, in debt up to her eyeballs, party girl, alcoholic, have mental problems or other problems.



Now since insurance companies get sued all the time do you think the 14 year old may sue the insurance company for paying his money to a UTMA account that Mom set up then wasted the money.



From the insurance company's perspective they will want to insulate themselves from a future lawsuit from the rightful beneficiary.



That's why Mom on this thread will have to be the court appointed guardian of the minor child's property. She'll still be able to use the money as she pleases after she is the COURT ORDERED guardian. Once that happens the insurance company will pay the claim and the 14 year old can't come back and sue the insurance company if Mom wastes the money.



Now you are correct. Once Mom gets the court order then yes she'll have to set up some type of custodian account at some bank to receive the funds. I'm NOT argueing that point.



_________________

Gary Spicuzza, *SAFE

Copyright 1956.

No Rights Reserved.

*Self Appointed Financial Expert
GarySpicuzza
Forum Expert
Leave a quick message


Forum Expert

Joined: 03 Apr 2008
Posts: 965

Location: West Pasco County, FL
243.67 Dollars($)

PostPosted: Thu May 28, 2009 1:25 pm   Post subject:   

Gary,



Your SAFE designation is safe. The insurance company will want a court order if the minor is the named beneficiary.



(This is why minors shouldn't be named beneficiaries. SDCharger, this does not mean to name someone else instead!!!)



If the money is intended for a minor, the owner should set up a trust while they are still alive. The trust remains unfunded unless they die. The insurance proceeds will then go to the trust instead of directly to the minor. The terms of the trust will determine when the child can take control of the money.



The insurance company can't just pay the money to mom because it is not mom's money. If the child is the named beneficiary and mom is the guardian and has a court order, mom will not legally be able to use the money as she pleases. She will be able to illegally use the money as she pleases. Legally, she will only be able to use the money to benefit the child.



You're right. I'm wrong. Thank you.



Fortunately, I have never had to deal with this situation. In my practice, in the vast majority of cases, the primary beneficiary is an adult. If the primary beneficiary is not an adult, I always send them to an attorney and take my direction from the attorney on how the beneficiary designations should read.

InsuranceExpert
Senior member
Leave a quick message



Joined: 05 Apr 2009
Posts: 662


142.73 Dollars($)

PostPosted: Fri May 29, 2009 3:50 am   Post subject:   

you guys are all great. i am quickly learning a bunch. this was such a terrible unforseen tragedy. i still cant get over that my ex left our 14 year old as beneficiary. well, i have got all information to the insurance company, so i guess we will see. i think the guardian ad litem is a good idea though, just so noone can say that i am misusing or abusing my sons money. woulden't you think? i even talked to the funeral director to see if he ever had come across a situation like this and he hadent(alot of times the beneficiary of a life policy will have the check sent directly to the funeral home so they can receive their costs first) once again, thanks for all the input. i will keep you all informed of this and how it turns out. peace

bjamm1972
New member
Leave a quick message



Joined: 27 May 2009
Posts: 13


7.29 Dollars($)

Quick Reply
Your Name
Subject
Message body
All times are GMT
1, 2  Next  
Page 1 of 2


Get a Quote
Ask Community Experts

flash plugin

Quick Links

Must See

Community

Hot topics in forums

Latest in blogs

AmPmInsure on Facebook



Page loaded in 3.971 seconds.