by picklesandchampagne » Wed May 20, 2009 02:06 am
I have been amicably separated from my husband of 18 years for 4.5 years. I took out a 100k life insurance policy on myself which I pay for.
I have two children...13 and 17 that I have as the beneficiaries. Is he entitled to the management of those benefits if I die and the children are still minors?
Is he entitled to the Florida spousal 30% of the benefits since we are still legally married?
He cannot manage money at all. My fear is that he can take those benefits and spend them improperly just by virtue of the fact that he would be the remaining parent.
I have two children...13 and 17 that I have as the beneficiaries. Is he entitled to the management of those benefits if I die and the children are still minors?
Is he entitled to the Florida spousal 30% of the benefits since we are still legally married?
He cannot manage money at all. My fear is that he can take those benefits and spend them improperly just by virtue of the fact that he would be the remaining parent.
Posted: Fri May 22, 2009 11:50 pm Post Subject: insurance
there is no reason to read a link that is NOT relevant to me.
Posted: Sat May 23, 2009 12:46 am Post Subject:
I hate to disagree,..but...i was told differently by the Insurance company I have my policy through.........it's a 401 (K) through my employment. I've spoken to several people ( on our Insurance board).
Disagree all that you would like, but you are wrong. If people are telling you differently, they are wrong. More than likely they didn't understand your question. This is very basic stuff. They won't pay directly to a minor, but a minor can be the beneficiary. With your son as the contingent, he is entitled to $0 unless your beneficiary dies before he does.
On BOTH my Life Insurance policy ( through the Military) AND my 401 (K), I have my son as 'Secondary' because he is a minor. I have my POA as 'Primary' for both.
No you don't. You have your friend as your primary beneficiary. Your friend may also have your power of attorney. How do I know this? 1) You told us that your friend is the beneficiary. 2) POA is not a valid beneficiary designation.
Ok, so your friend who has your POA is the beneficiary of your life insurance policy. What does this mean? If you die today, all of the money belongs to your friend. Your son is entitled to nothing. What about the fact that she has your POA? It's irrelevant. A POA expires as soon as you die.
Even though you trust her, there are lots of issues.
1) She decides that she deserves the money.
2) She can't give the money to your son without cutting into her lifetime gifting exclusions.
3) Something happens and she needs the money.
4) She is divorced or gets divorced and the judge counts the money as hers (BECAUSE IT IS HERS).
5) There is some sort of judgment against her and she can't legally give money away.
If you want the money to go to your son, he MUST be the primary beneficiary or there must be a trust set up through your will that directs that the money will go to him. The insurance proceeds must get paid to this trust. Your friend can be the trustee.
You have things set up in a way that at worst will cause your wishes to not be followed and at best will have negative consequences to your friend and/or your son.
Posted: Sat May 23, 2009 03:59 am Post Subject:
Expert, if the primary beneficiary decides to gift the money to the secondary beneficiary, won't that income become taxable for the secondary beneficiary?
Posted: Sat May 23, 2009 04:18 am Post Subject: insurance
Well, then maybe the Military has told me the wrong information all of these years ( which I don't think they have). I'll check with them. THEY (Military) are the ones who suggested to have my son as a 'Secondary' while he is a Minor.
Posted: Sat May 23, 2009 09:05 am Post Subject:
The following information I've found in www[dot]military[dot]com/
Hope the information was useful.
Posted: Sat May 23, 2009 10:11 am Post Subject:
Just to doublecheck, do I understand correctly that a living trust does not have to be probated? And also, can any outstanding debt I may have(car etc.) be attached to those proceeds?
Assets that are titled in the name of the trust do not enter probate. This is a big thing to understand. A trust must be funded for the trustee to have control the property.
Funding a trust means nothing more than retitling the assets into the name of the trust.
Regarding creditors ability to reach trust assets this is state specific and depends whether or not your trust contains a spendtrift clause. Generally speaking, after you die creditors are limited to probate court assets and can't reach the assets in the trust.
This DOES NOT mean nor did I say your creditors can't reach trust assets while you're alive, they can.
See this LAWYER LINKY
Spendthrift Provisions. Each trust created by this Trust Agreement shall be a spendthrift trust to the fullest extent allowed by law. Prior to the actual receipt of trust property by any beneficiary, no property (income or principal) distributable under any trust created by this Trust Agreement shall, voluntarily or involuntarily, be subject to anticipation or assignment by any beneficiary, or to attachment by or to the interference or control of any creditor or assignee of any beneficiary, or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of any beneficiary, and any attempted transfer or encumbrance of any interest in such property by any beneficiary hereunder prior to distribution shall be void.
Posted: Sat May 23, 2009 11:41 am Post Subject:
Expert, if the primary beneficiary decides to gift the money to the secondary beneficiary, won't that income become taxable for the secondary beneficiary?
No. It would be no different than me giving you $10,000,000. You would not pay any tax. I would! The gifter is responsible for the tax.
Keeping this simple, we all have some money that we are allowed to give away tax free. IF the primary gives the money to the secondary, this would go against the lifetime gifting limit.
In other words, even if SDCharger's friend could be trusted to give the money to SDCharger's son, SDCharger is financially hurting her friend and/or her friend's family.
Posted: Sat May 23, 2009 11:44 am Post Subject:
"The Military" is obviously not an expert in this issue. There is a reason why nobody is contradicting what I'm telling you.
A minor can't directly receive the money. A minor can be the beneficiary. Don't confuse these two things.
Posted: Sat May 23, 2009 04:14 pm Post Subject:
Expert, if the primary beneficiary decides to gift the money to the secondary beneficiary, won't that income become taxable for the secondary beneficiary?
Tax implications aside this will NEVER happen EVER.
People change, when people die.
This is human nature 101.
If anyone thinks someone who was just paid a $100,000, $250,000, $500,000 or more death benefit in which they have no LEGAL obligation whatsoever to part with their money that person is simply naive' with no experience in actually paying a death claim.
AND...SD...I hope you understand that a Power of Attorney DIES when the Grantor of the Power of Attorney dies.
Posted: Sat May 23, 2009 06:08 pm Post Subject:
AND...SD...I hope you understand that a Power of Attorney DIES when the Grantor of the Power of Attorney dies.
Somehow, I'm not so sure that she's getting any of this. Her best bet is that she actually did write "Power of Attorney" as her primary beneficiay. If the insurance company caught this, they would have rejected the application. However, if they didn't catch it, since "Power of Attorney" dies when she does, the money would go to the contingent beneficiary, her son.
Unfortunately, the chance that she wrote "Power of Attorney" and the insurance company didn't catch it is virtually non-existent.
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