Is it a good Idea to specify minor kids or Revocable Living Trust as contingent beneficiary on 401k and HSA Accounts?
3 attorney answers
This question does not have a simple answer, but is something that you should discuss with the estate planning attorney who drafted your trust. The designation of a trust as beneficiary may be appropriate, but it depends on how the trust is written and what the client is trying to accomplish. If you did not have an estate planning attorney draft your trust, then I recommend that you consult with an estate planning attorney to review the trust agreement and also to advise you about beneficiary designations.
I agree with my colleague above, but would go a step further to say it is generally a bad idea to name a minor as direct beneficiary of nonprobate assets. Reason being, if a minor is slated to take an asset outright, then they will likely require the appointment of a financial guardian. There is an expense associated with that process (initially and annually), and often it means that the minor will not be able to access the asset in any meaningful way during his/her minority. So, a Trust is almost always a better way to go.
Yes, you can designate a trust. First, you need to speak with an estate planning attorney.
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