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Minor Beneficiaries of a Death Benefit

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Jester Nails

Junior Member
What is the name of your state? Iowa

My mother died and had my two sons as the beneficiaries of her Life Insurance. Since they are minors, the insurance agent told me I need to get a court appointed letter of guardianship, and then they actually give the benefit to me. My mom died in Florida, but I live in Iowa. The clerk of courts sent me to a lawyer because they didn't have forms (supposedly only a lawyer has the forms and can fill them out). The lawyer I contacted tells me that I need more than the letter. I need to become a conservator of the money, and the money can only be used for the benefit of the children. I wanted to give some of the money to my father to cover some of the expenses he's incurred because of my mom's death. Now it looks like I can't. Or can I? Should I try another lawyer, or is what the original lawyer saying correct?

Any help would be greatly appreciated.

Dandy Don

Senior Member
You need to be consulting with a family law attorney to get advice about acquiring legal guardianship.

The money can not be lent to your father or anyone else for any reason. You must set this money aside in a trust account (any bank that has a trust department can advise you on how to set up a simple account) until the kids reach age of adulthood in your state and then the money is theirs to use for college, living expenses or whatever.

DANDY DON IN OKLAHOMA ([email protected])


Senior Member
First, my condolences on your loss. I think the lawyes may be creatibng more work for you than is necessary.

The money was left to your kids, and not to you. It would be plain wrong legally for you to give your kids' money to others, even those as deserving as your survivng parent. You can always give YOUR own money to your father. That's why the laws, insurance companies and courts seek to protect minor beneficiaries' funds. It is the kids' money.

One easy approach that may make sense is for you to allow the insurance company to hold the funds for the kids "at interest" until they reach 18. At least the money will be safe and sound. Given the low level of current interest rates generally, it may well be the insurance company's rate is equal to or higher than local banks, so the the kids would do better. And investing in stocks or mutual funds may not be all that smart, depending on the kids' need for the money at 18 (if they are 16 they can't run the risk of market fluctuations if they'll need the money to attend college at 18).

Leaving the money with the company avoids the need for guardians, conservators, or trusts, and keeps costs and hassle down. (In some states the courts appoint a crony as trustee, or relegate the funds to a low yielding account at a local bank that was a big contributor to the local political party -- yes, I've been around).

True if the the money is held by the insurance company it can't be used by you now, even for the kids' benefit, but that's often why your father left it to them, not you, so they would have it all when they are 18. (I know, giving an 18 year old lots of money, which can be used to buy a hot car, clothes or drugs is as scary as a parent using it to supplement the parent's lifestyle or reduce what he or she would otherwise pay to support her children).

If the deceased wanted you to have it, or your mother, he could have changed the beneficiary. He wanted his grandkids to have it. Of course if the amount is huge, and access to it would be essential to enable the kids to attend a better school, have braces, or eat, then the more complicated steps to get control over it before they turn 18 may be advisable.

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