Abacoa & Alton Neighbors December 2020

14 Abacoa &Alton N E I G H B O R S | D e c e m b e r 2 0 2 0 When you have children, you will do everything possible to make sure they are safe and happy. It is a major reason why parents buy life insurance. Having life insurance means your children will be financially protected if something happens to you. It’s critical to make sure that you have named the correct beneficiary to your life insurance policy. Most often, a spouse will name the other spouse as the beneficiary of the life insurance policy. But what if the unthinkable happens and both parents die? If minor children have been named as the alternate or contingent beneficiary, your good intentions may not work out as planned. OPTION A: The government will decide how your money is spent on your children. Children cannot directly receive the proceeds of a life insurance policy. Florida law requires a probate judge to appoint a guardian of the property to take control of the money and use it for the children’s benefit. When a guardianship of the property is in existence, the policy proceeds will be depleted by legal expenses to pay the guardian’s attorney. There will also be strict oversight by the probate judge on how the proceeds are spent and the proceeds are often required to be held in a restricted bank account. The bank will not be allowed to disburse funds to the guardian without a court order signed by the probate judge. OPTION B: Set up a trust and keep the government out of your children’s financial affairs. By naming a trust as the alternate or contingent beneficiary to your life insurance policy, the policy proceeds will go directly to the trust and avoid a guardianship of the property. A trustee that you have selected, possibly a close family member or friend, will use EXPERT CONTRIBUTOR Do You Have Life Insurance & Young Children? Then You Need a Trust Submitted by Timothy T. Patykula, Esq. 601 Heritage Drive, Suite 455 Jupiter, FL 33458 (561) 530-2880 Timothy T. Patykula, Esq. www.lighthouselawfirmpa.com The Coronavirus has shown that life can turn in an instant. Do you have a will or trust to protect your family from the unexpected? Speak with an attorney today to create an estate plan that will bring you peace of mind.