Being comfortably middle-class now, we (finally) have gotten ourselves set up with wills and a hefty amount of life insurance on both of us. My husband's brother is the guardian for our children. But I'm confused now as to how the life insurance money is handled. Obviously if one of us dies the other gets the life insurance, all the money, and the kids. If both of us die, everything is supposed to go to the kids, but how is the financial end of this handled when they are still minors? I can't tell if the kids can be recipients of the life insurance proceeds if they aren't adults. Would the money go to BIL and he uses it to care for them, or is it held by the courts and he has to apply for reimbursements, or what? We don't have a trust set up or anything. Should we? We are talking about a substantial amount of life insurance here and I don't like the thought of our kid getting handed a huge check on her 18th birthday and blowing it on something an 18-year-old thinks is a good idea instead of using it for college.
We set ours up as a trust that would be created at the time of our deaths. My sister would get guardianship and a lump sum of insurance money directly, but DH's sister would administer DS's money until he turns 30, or something like that. The wording required a lawyer.
SIL would get the kids, and be able to use DH's pension benefits and my ss benefits to take care of their monthly expenses. The proceeds from selling the house, IDK what to do with. Our life insurance benefits I think I would stipulate should go direct to a higher learning institution, otherwise be held in trust for them until they are 22.
I didn't want someone to get rich from us dying, but wanted to make sure kids needs are met.
Carson, living life with my 3 boys: DH, DS Dec '09 and newbie DS Sept'12
always two in my