a new will after divorce

[startingover]

What do people normally do about life insurance and who to leave it to after the divorce.  I have a small life insurance policy and I want to leave it to my kids but have someone to actually manage it.  Is it required that the stbx have control?

[Lee Borden]

It's not required, but it's what most of my clients do. The alternative would be to name some other adult as a trustee with the authority to decide how much to give the guardian and when. My least favorite alternative is to name the children as beneficiaries, because that typically requires their guardian to get court approval (think paying money to lawyers) to spend the money.

[anniewalker]

I have everything I own going into a trust administered by my brother on behalf of my minor child (if she is under 25 when I pass away).  My ex is horrible with money, so leaving him a chunk of change was not an option! 

The way mine is set up, my brother can access the money on my daughter's behalf (to buy her a car, or school clothes, or a class ring or whatever) and then when she turns 19 she will get an amount (I forget what it is exactly... maybe $5,000?).  If she goes to college, then my brother is instructed to pay all of those expenses and she gets full control of the trust upon earning a 4 year degree.  If she doesn't go to college, she gets the money at age 25.  She only stands to get around $300,000 (gross, before my funeral expenses and debt is paid off!) if I were to drop dead right now, but I figure you never know.  I could accumulate some wealth at some point and all this will and trust and junk be necessary.  It is great that you are thinking about the future well-being of your kids.  So many people do not and...well... life (and death) happens.

[livealittle]

Dave Ramsey has a lot of interesting things to say about this kind of thing.

the beneficiary is who gets the money, but if it is the child, and the child is a minor, they cannot inherit it until they become of age, so it goes whereever you have directed.  If that's the case and you haven't directed...who knows?

Dave says the thing to do is have a "love drawer" which is a place in your house where a notebook is kept with "what to do if I die or am incapitated and here's the information you need to do it" A wonderful idea.  He says to include things like your banking information, who's on the accounts, insurance policies, loans, where the will it kept, your health directive, and to find someone you trust to name as the administrator/executor of all this.  This person could be a family member or close personal friend, however, keep in mind that some states require an executor of a will to be a state residence.  So if you are in AL and your brother who will be your executor of your will lives in Alaska.....and AL happens to be one of those states....you can imagine the confusion and delay in taking care of business.

Dave also brings up the point that you need someone local to help a relative take care of things if your executor is your relative and not local.  Reasons are - the local person knows the area and can take care of things on lunch breaks and such while a non-local person may incur lots of travel expenses, hotel stays, and time off work to take care of your estate.  All of those expenses should be paid by your estate....

anyway, I highly recommend checking out Dave Ramsey's books about Financial Peace Revisited and The Total Money Makeover.  He offers practical easily understood advice. You can probably check out both these books from your local library.