Since minors cannot control their life insurance proceeds, you could name a trusted adult who will make sure that the death benefit is used in a responsible manner for the welfare of the children. Or you can set up a trust and make the trust the beneficiary of the policy. In the trust, you can spell out how and when you want the proceeds distributed to the children, name a trustee, and have more control than by naming another person as beneficiary.
I agree, the safest way to leave your child life insurance proceeds is to set up a trust with a trusted attorney. It should only cost a few hundred dollars, but you will have total piece of mind that your children will legally be taken care of in the event of your death.
Not only should you consider how the proceeds should be allocated while the child is a minor but may be rationing the proceeds as a young adult. You can only imagine what an 18 or 19 year old would do with a lump sum check of $500,000 or more.
Within a trust you can allocate funds at different ages or life events, such as a home purchase or marriage, so the money is not spent or "blown" on parties or sports cars.
A legal trust is your best bet and change the beneficiary to this trust.
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Not only should you consider how the proceeds should be allocated while the child is a minor but may be rationing the proceeds as a young adult. You can only imagine what an 18 or 19 year old would do with a lump sum check of $500,000 or more.
Within a trust you can allocate funds at different ages or life events, such as a home purchase or marriage, so the money is not spent or "blown" on parties or sports cars.
A legal trust is your best bet and change the beneficiary to this trust.