Do I put my minor children's names below mine as co-beneficiaries, or as contingent beneficiaries?

Does it make any difference? This is on an application form for life insurance on my husband. How many contingent beneficiaries can he have?





If we don't name the children on the form and he instead names his brother as beneficiary who he wants to be the children's guardian (in case my husband and I pass on together), the children lose all or any right to the benefits, don't they? I am thinking he should not do this because if the brother dies later on, the money goes to his wife (my husband's sister-in-law), and my children will be left penniless. My husband's thinking is his brother needs money to provide for my children's needs. I'm thinking he can name the brother as trustee who then has authority to use some funds for the children's needs, but is supposed to separate his own bank account from the trust account.

Do I put my minor children's names below mine as co-beneficiaries, or as contingent beneficiaries?
Make the contingent bene a formal trust for your kids. Its possible to add additional language to the policy that states that if the kids are not minors anymore, then the Insurance Co can pay directly to them.





But don't make it payable directly to your Brother in law. I recommend a lawyer as your Trustee or at least have a 2 person Trustee. It just provides additional assurances to you that your kids will be looked after in the event of common disaster.
Reply:You are correct - your BIL should not be listed.





You should be the Beneficiary.


There should be no co-beneficiaries.





Your children should be the Contingent Beneficiaries.





That way, the money will belong to them and will stay with them.





If you two were to die, then the executor of your will could set this money up in a trust for the ebenfit of your children for their expenses.





Use the will to detail who the children's guardian will be and how they should set up a trust fund at Fidelity Investments or somewhere with regular payments to him for their care until they are 18 or 25 or whatever.
Reply:See an attorney and have a trust setup. As part of your will and trust, you can setup who would get the kids. You can then setup a policy to be the owner and beneficiary to receive the insurance in event of death. The terms of the trust can dictate how money is to be used, i.e for children's benefit, how much can be spent each year, how much can be paid to brother for taking care of kids, etc...





This ensures that your kids get the money but also helps the brother out by giving him some $$ to help raise the kids.
Reply:Contigent beneficiaries receive nothing unless the primary beneficiaries are all dead. Co-beneficiaries share if two or more are alive.





I like the trust idea in this case, but talk to a estate planner.
Reply:I would list the kids as contingent beneficiaries, NOT co beneficiaries.





Yes, if he lists your brother, then the money goes to your brother, not the kids.
Reply:Based on your other question, you should list your children's trust as a contingent beneficiary. If children get that kind of money directly passed to them, you can have an Anna Nicole-type situation on your hands in a second.