The insurance company is probably correct. If your son is under 18 then
you will need to open a guardianship to obtain the funds.
Just as importantly, you will not be able to spend any funds unless the court authorizes it in advance.
It is a complicated system designed to protect minors and their monies. You are likely better off hiring an attorney to assist you
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The insurance company cannot pay the benefit to a minor because they cannot obtain a binding receipt from him (he has the right to repudiate the receipt upon reaching age 18) Therefore, to protect themselves, they are requiring the appointment by the Probate Court of Cook County a Guardian who is legally authorized to receive the money on behalf of your child. You almost surely must work with an attorney to prepare the necessary forms and make arrangements. You are going to have to post a bond with the court to make good any losses during your administration. As you have previously been advised, you will need advance approval of the court to withdraw funds for your son's benefit, and you will have to file an accounting with the court once a year to show what income you have earned (dividends, interests, etc.) and what expenses you have paid. Actually your attorney will most likely do most of the work in the court. Your job will be selecting the bank or other investment of the funds, and alerting the court to your son's needs. When he turns 18, you will make a final accounting to the court, and turn over the balance of the funds to your son.
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You have already been provided good answers, but I note that if the amount of the distribution is less than $10,000.00, you may be able to obtain the distribution without a guardianship by citing Section 25-2 of the Probate Act or having an attorney send correspondence referring to it: "When appointment of representative of ward unnecessary.) Upon receiving an affidavit that the personal estate of a ward does not exceed $10,000 in value, that no representative has been appointed for his estate and that the affiant is a parent or a person standing in loco parentis to the minor or is the spouse of the ward or, if there is no spouse of the ward, that affiant is a relative having the responsibility of the support of the person under legal disability or ward, any person or corporation indebted to or holding personal estate of the ward may pay the amount of the indebtedness or deliver the personal estate to the affiant. In the same manner and upon like proof, any person or corporation having the responsibility for the issuance or transfer of stocks, bonds or other personal estate may issue or transfer the stocks, bonds or other personal estate to or in the name of the affiant. Upon the payment, delivery, transfer or issuance pursuant to the affidavit, the person or corporation is released to the same extent as if the payment, delivery, transfer or issuance had been made to the legally qualified representative of the ward and is not required to see to the application or disposition of the property."
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