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What does putting my 4 year old son as the primary beneficiary on my 401K and my life insurance means (instead of my wife)?

Pittsburgh, PA |

My wife and I are having some issues these days i hope they will go away soon, but for now, i'm thinking about putting my son (a 4 year old) as the primary beneficial for my 401K and my life insurance policy (and everything else) and putting my wife as the contingent beneficiary, what would that mean legally, if i died can the money be used to pay for the mortgage for example or will doing this only complicate things for my wife and my son? will he need to be at least 18 years old to be able to use the money, or can my wife (as his mother) use the money immediately to pay for the mortgage, and may be save for my son's education, ...etc?

Attorney Answers 3

  1. By doing what you are proposing you are really setting yourself up for a disaster. If the funds, at least the life insurance, are payable to a minor the money will be put in a trust for minors account (UTMA) or held by the court. The child will be able to access the funds at 18 and you will have no control over that. Although this may be a temporary issue, you would be wise to plan for it and you can probably accomplish most of what you need by using proper trusts, although I can foresee many problems and logistical issues. I would visit with an estate planning attorney to get your planning in order as soon as possible.

    This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website:

  2. I agree with my colleague. In order to protect who is going to be able to control any monies left for your son, you should have a proper estate plan prepared.

    Many firms in Pittsburgh who practice estate law, including my own, offer free consultations. I would be happy to assist you.

    Joe Hirschmann

    The answer provided is for general information only. No attorney-client relationship has been formed. Please contact an attorney in your area for case-specific advice.

  3. First it's a bad idea to name minor children as beneficiaries on retirement accounts and life insurance policies. Instead, you should consider naming a trust as the beneficiary so that the money can be held past your son's 18th birthday. It's unlikely at age 18 he'll be mature enough to invest and spend the money wisely and without a trust in place, that's when he'll get the money. It would be like naming the local Corvette dealer as your beneficiary.
    Equally important, you will likely need your wife's consent to change the beneficiary of your 401(k). As an ERISA plan, your spouse is the presumed beneficiary and must consent to anyone else being named. Check with your employer about this and get a copy of a beneficiary designation form. You'll likely find the paragraph requiring spousal consent.
    I suggest you contact an estate planning attorney in your area who can assist you in structuring a trust for your son and who can discuss with you how such a trust should be drafted to minimize the income tax cost of directing qualified retirement accounts into a trust. It can be a little tricky and not all estate planners are as familiar with the tax rules for directing retirement accounts to a trust as they should be.

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