Challenges With Naming Minors as Beneficiaries
It is a natural impulse to want to name children, grandchildren, or other descendants to inherit a portion of assets in your estate plan. The naming of a minor beneficiary directly on an account, however, can create unforeseen challenges with your estate plan. The following reviews some helpful reminders about naming minors as beneficiaries as well as why you might want to consider other options. Unintended Consequences Might Ruin Your Plans Clients often assume that their estate plan is complete after they have signed their will and trust. These clients will often then proceed to name the same beneficiary on all of their estate planning documents. If you name a minor as a beneficiary, some substantial and undesirable situations might occur. For example, assets might require the appointment of a conservator, which can lead to a time-consuming and costly process. The person appointed by the court to act in such a role also might not be the same individual that you would want controlling your assets. Additionally, many jurisdictions require an inventory as well as annual accountancy to be filed with the court even if the conservator is a parent of the minor. Assets held in a conservatorship then pass [...]