Life Insurance Policies

[Humusluvr]

What is the name of your state? TX/OH

Hello All!

I am looking for info on getting insurance to cover both baby and dad. Its a little complicated, and before I call my insurance agent, I wanted your advice.

I have a $100K life insurance on myself, currently, and the beneficiary is MY father. He is aware that, if I pass away, the money is to be used for the best interests of my son. So, that's taken care of (I think).

I am thinking about taking out a policy on my son (just in case, small, $25K or so, to cover funeral expenses and the such). Should I be the beneficiary? If I pay for the insurance, and our son were to, God forbid, pass away - would dad be entitled to half?

I would also like to take out a policy on my son's father (if he agrees). If my son's father were to pass away, then I would not receive any child support any longer, and I would like our son to be taken care of financially and for college. But dad also has another child from a previous relationship. If I take out a policy on dad, who should be the beneficiary? I know that dad has a small policy through his work (like $10K) and the beneficiary is his brother. He told me his brother will split it up as he sees fit, but that doesn't necessarily mean each of dad's two kids would get $5K - it means whoever in the family is having financial problems would probably beg for money, and his family all thinks I'm some rich beyotch - so I believe our son would get nothing. Funny that my saving and frugality and incessant planning throughout the years gets me branded, but that's what I get. I can only take care of my son the best I can.

Soooooo, can I take out a policy on dad that would benefit ONLY our son, not his other child from another woman? (I have the feeling y'all are going to crucify me for asking) I feel its important to be prepared for our son's future, and I want to make a good decision here.

Has anyone else been through this? Any suggestions? I want to take out a policy on dad that would cover child support for the 18 years, son's college, and a little extra so our son would be taken care of.

Thanks in advance

 

[bugsmom18]

You would actually be better off getting a will done so that a trust could be set up for your son. My life insurance goes 1/2 into my trust for children and 1/2 to my husband outright(we share a child). The will sets up the trust and names a person to manage the money, give it to the children if they need it for anything and then they get the remaining amount at age 25 (I think).

You can leave your dad as the beneficiary and I realize that you have talked with him about how the money is to be used. BUT he can legally do anything he wants with that money if you were to pass away. A trust elimintates that issue. It would be solely for the child's benefit.

As for a policy on dad, if he agrees, you can purchase a life insurance policy for him and you be the beneficiary and owner/payor of the policy (meaning you pay for it and any changes can be made by only YOU). Term life insurance would be the cheapest and you can usually pick the term (20 years, for example)

My best advice is to get the will done**************.you need one anyways (all parents do)! The type of trust that I had set up is called a testamentary trust. (i work in an insurance office BTW)

OOPS, I forgot to add - YES the policy on dad would only benefit YOUR son if you set it up/pay for it, etc. It would have nothing to do with new bedmate or other children. The policy on your son, if you are the beneficiary would be your's. Dad doesn't get half. Since your child is so young, you have to be named as the owner of the policy and beneficiary. If you list someone else as beneficiary, they're going to share the money with you.

 

[penelope10]

What is the name of your state? TX/OH

Hello All!

I am looking for info on getting insurance to cover both baby and dad. Its a little complicated, and before I call my insurance agent, I wanted your advice.

I have a $100K life insurance on myself, currently, and the beneficiary is MY father. He is aware that, if I pass away, the money is to be used for the best interests of my son. So, that's taken care of (I think).

I am thinking about taking out a policy on my son (just in case, small, $25K or so, to cover funeral expenses and the such). Should I be the beneficiary? If I pay for the insurance, and our son were to, God forbid, pass away - would dad be entitled to half?

I would also like to take out a policy on my son's father (if he agrees). If my son's father were to pass away, then I would not receive any child support any longer, and I would like our son to be taken care of financially and for college. But dad also has another child from a previous relationship. If I take out a policy on dad, who should be the beneficiary? I know that dad has a small policy through his work (like $10K) and the beneficiary is his brother. He told me his brother will split it up as he sees fit, but that doesn't necessarily mean each of dad's two kids would get $5K - it means whoever in the family is having financial problems would probably beg for money, and his family all thinks I'm some rich beyotch - so I believe our son would get nothing. Funny that my saving and frugality and incessant planning throughout the years gets me branded, but that's what I get. I can only take care of my son the best I can.

Soooooo, can I take out a policy on dad that would benefit ONLY our son, not his other child from another woman? (I have the feeling y'all are going to crucify me for asking) I feel its important to be prepared for our son's future, and I want to make a good decision here.

Has anyone else been through this? Any suggestions? I want to take out a policy on dad that would cover child support for the 18 years, son's college, and a little extra so our son would be taken care of.

Thanks in advance

Yes, you can if Dad is agreeable. You will be the owner of the policy and can designate anyone you wish to be the beneficiary.

On the policy you already have, I would suggest changing the beneficiary from your Dad to your Dad as trustee for your son.

And I completely understand about the life insurance on your son having lost a child myself. If you own the policy the benefits will go to who you designate. Period.

In my case, I was fortunate to have enough in savings to cover the expense of the funeral. I donated the proceeds to a local charity that helps older kiddos. (16 to 21--the same age bracket as my son). I donated the money in my son's memory.

Not all the money went to charity though. My son loved to shop---LOL part of being bi polar, so I knew he would be p.o.ed if some of the money wasn't spent. I gave the oldest $500.00 and told her her brother would have wanted her to her to have it. And it was around the time of Lil Bit's b-day. With the money I allotted to her we purchased a puppy. Told her to think of it as birthday present from her Big Brother.


As far as further estate planning- I have a revocable living trust set up---another alternative on the policy you have on yourself would be have the trust set up as beneficiary. I found an attorney that set up the trust for a very reasonable price. (I live in TX). In fact, the trust did not cost me anymore than the price of a simple will that another attorney had quoted me.

 

[nextwife]

The beneficiary is the OWNER of the money. It is THEIR money.

You should leave it to a trust for your child, not to a third party. What if your dad died shortly after you? The insurance funds would belong to dad's estate, NOT your child, or your child's trust. It is never wise to make a third party the actual beneficiary of the life insurance proceeds you want someone else to benefit from.

 

[CJane]

The beneficiary is the OWNER of the money. It is THEIR money.

You should leave it to a trust for your child, not to a third party. What if your dad died shortly after you? The insurance funds would belong to dad's estate, NOT your child, or your child's trust. It is never wise to make a third party the actual beneficiary of the life insurance proceeds you want someone else to benefit from.

AND it's never a good idea for the beneficiary to be a minor child.

IMO, regarding life insurance for Dad... take out a 20 year term policy that is roughly equal to the amount of CS he'd pay over that amount of time, plus some tacked on for inflation. So, if his CS is $400/month, get a $150K policy. If he doesn't die, you're out the premiums. If he does, JR is provided for.

 

[Humusluvr]

OK, so how does this trust/trustee thing work?

I trust my father in EVERYTHING financial (he's an accountant, and the person I trust the most in the world). He will do what is right for my son, so that's why I named him beneficiary in case I die. I didn't think about the money being part of his estate should he then pass soon.

You're saying I should set up a trust for my son, with my dad as trustee? I also have a brother who I would trust, and he is roughly the same age as me - is it better to use my bro than my dad?

IMO, regarding life insurance for Dad... take out a 20 year term policy that is roughly equal to the amount of CS he'd pay over that amount of time, plus some tacked on for inflation. So, if his CS is $400/month, get a $150K policy. If he doesn't die, you're out the premiums. If he does, JR is provided for.

I think that is what I'm looking for, CJane.

I was Googling, and I found that in some divorces (we were never married, but maybe this would apply) the child support paying NCP is required to maintain life insurance to cover the cost of child support should he pass. Is it better to have it written that he do it, or just do it myself so that I know its done (I guess for peace of mind)?

 

[Ohiogal]

HL how did you work out the traveling to Texas but being in Ohio thing?

 

[CJane]

I was Googling, and I found that in some divorces (we were never married, but maybe this would apply) the child support paying NCP is required to maintain life insurance to cover the cost of child support should he pass. Is it better to have it written that he do it, or just do it myself so that I know its done (I guess for peace of mind)?

Not only so you know it's done, but so you know that you're the beneficiary. Can't exactly hold a corpse in contempt if you find out he let it lapse or left it to great aunt betty. Yanno?

 

[Ohiogal]

OK, so how does this trust/trustee thing work?

I trust my father in EVERYTHING financial (he's an accountant, and the person I trust the most in the world). He will do what is right for my son, so that's why I named him beneficiary in case I die. I didn't think about the money being part of his estate should he then pass soon.

You're saying I should set up a trust for my son, with my dad as trustee? I also have a brother who I would trust, and he is roughly the same age as me - is it better to use my bro than my dad?

There should a TRUST set up for your son with your dad as trustee. NOT as beneficiary. Same with your brother. Whoever inherits the money can do whatever they want with the money.

I think that is what I'm looking for, CJane.

I was Googling, and I found that in some divorces (we were never married, but maybe this would apply) the child support paying NCP is required to maintain life insurance to cover the cost of child support should he pass. Is it better to have it written that he do it, or just do it myself so that I know its done (I guess for peace of mind)?

You should be the owner and quite frankly he should own a policy on you in case anything happens to you.

 

[CJane]

Just be careful. My son's ... Father ... (you like that PSDinMD?) saw on here that I was thinking about life insurance policies for him and my ex and tried to get an RO against me.

 

[penelope10]

And I just wanted to point out one other thing, until that trust is set up the beneficiary designation on your policy now should be set up as GP as trustee for son. As another person pointed out the money will not become part of your Dad's estate.....

Once you have the trust set up it can either be left as, GP as trustee, or the beneficiary can be the trust. The trust will set out who acts as trustee as well as future distribution once the child reaches legal age etc.

My trust states the Kiddos get a certain percentage at 25, 30, and 35. (IF they can't responsibly handle the $$ after 35---then that their problem LOL!!!!!)

 

[Humusluvr]

HL how did you work out the traveling to Texas but being in Ohio thing?

Put my house on the market.

Gave my two weeks at my job.

Let dad know he was getting 4 weeks visitation while I was in Texas packing up to leave. Dad has been sleeping on my couch at night so he can play with baby while he's awake, and he helps with a feeding at night. He can't stand crying or diapers, so I get to handle that. Dad wasn't in Texas for the first week I got here, and he won't be here for the last week (will be out of the country when we get in the uhaul and move back to Ohio).

Ohiogal, I know it is a gamble, but I made dad fully aware that we were there to give him visitation, pack and leave. I told him I wouldn't come back and he could hire an attorney and go through the courts if he tried to keep me in Texas. He said he was happy that he was getting this time. It is also giving us time to draft up a visitation and support agreement that we both agree on. We are getting along pretty well, and I hope for our son that things stay civil. Dad understands my health issues, and he doesn't want to be the one raising our son. So I'm being as nice as I can, and he's happy as pie on my couch.

I actually think things worked out better than I could have imagined. We are actually working things out together and communicating, which we had a rough time at while we were together, unfortunately.

 

[Humusluvr]

Not only so you know it's done, but so you know that you're the beneficiary. Can't exactly hold a corpse in contempt if you find out he let it lapse or left it to great aunt betty. Yanno?

True that.....

 

[Humusluvr]

And I just wanted to point out one other thing, until that trust is set up the beneficiary designation on your policy now should be set up as GP as trustee for son. As another person pointed out the money will not become part of your Dad's estate.....

Once you have the trust set up it can either be left as, GP as trustee, or the beneficiary can be the trust. The trust will set out who acts as trustee as well as future distribution once the child reaches legal age etc.

My trust states the Kiddos get a certain percentage at 25, 30, and 35. (IF they can't responsibly handle the $$ after 35---then that their problem LOL!!!!!)

So, as kiddo needs money - GP as trustee would be able to dole out for my son? Or son only gets money at a certain age.

Lets say I pass away, and son's dad doesn't have the money to put kiddo in soccer. Kiddo wants to play. Can GP give the kiddo money to play soccer? Or only major events? Such as?

I also want to leave money so that my parents would be able to visit kiddo freely from Ohio to Texas because I'm assuming that if I die, and father gets custody and yanks kiddo out of Ohio to Texas (I'm actually tearing up at the thought), that my family could still visit, and have funds to do so. Unless dad still doesn't want custody, and allows my brother and his wife to be the guardian while child stays in Ohio. Then I want son's dad to have some money to be able to visit more. Sounds confusing, was confusing to type, but its what dad and I are working on.

 

[penelope10]

Just be careful. My son's ... Father ... (you like that PSDinMD?) saw on here that I was thinking about life insurance policies for him and my ex and tried to get an RO against me.

Oh good grief----I take it THAT didn't work. Ya know if I was a 2nd wife or 3rd or 4th (LOL you never know these days) I would WANT my hubby to take out a life insurance policy such as this. And I'd make darn sure that the premiums were kept up. First, because I wouldn't want the possibility that the kiddos from the previous relationship might feel hurt that Dad did not want to provide something for them after he passed away. And if Dad and I had kiddos together I would want to try to alleviate any bad feelings that might arise between my kiddo and his or her siblings.

Plus in the case of previously born minor children ,I would be wise enough to know that it protects the estate that we built together as a couple.

Sorry for the hijack OP, me and my big mouth, and the whole 2 cents thing.