Comments on: Can you direct a beneficiary to spend life insurance proceeds a specific way?

By: Compressed Fart Tycoon

Compressed Fart Tycoon — Mon, 08 Feb 2010 01:36:49 +0000

The Professor is 100% right.

Don’t listen to Dana. If you make the estate the beneficiary of the trust, the dollars will be forced through probate and you will miss one of the best features of a life insurance policy. Bad idea!!!

By: Dana B

Dana B — Fri, 05 Feb 2010 00:52:46 +0000

If the policy directs the proceeds be paid to an individual beneficiary, then that beneficiary gets the money and can do whatever they want with it. However, you could instead name your estate the beneficiary of the policy, and then you could direct in your will what is to be done with the proceeds.

By: liberal_60

liberal_60 — Tue, 02 Feb 2010 12:40:55 +0000

You can probably use the life insurance to fund a trust that can restrict the use of the money. You need a lawyer to help you with this. Don’t try it on your own. Laws on this vary from state to state.

By: The Professor

The Professor — Sat, 30 Jan 2010 07:03:50 +0000

The beneficiary of the policy should be a testamentary trust in favor of the person who you want to benefit. The death benefit will go into the trust, which will be administered for the benefit of the beneficiary according to the terms of the trust.

A lawyer can help you to do this. It is quite common. This is not a “do it yourself” project, or one for those non-lawyer trust mills.

You will need to name a trustee–this can be someone you trust whom you expect to outlive you, or the trust department of a bank. A successor trustee should also be named, just in case something unexpected happens to the original trustee. The trustee’s job is to make sure your instructions are followed to the letter.

By: CRAZYMOM1966

CRAZYMOM1966 — Fri, 29 Jan 2010 09:26:25 +0000

When they do there will they can put it in writing what they want done with the life insurance money.