Hi, it’s Guy DiMartino. I am in Northwest Indiana state planning and probate lawyer. Today I’d like to talk a little bit about life insurance and how it can be an important component of an estate plan. However, you have to really think it through because there can be some consequences that you may not intend. If you have any questions about an Indiana state plan or probate matter, and you’d like to get in touch with me, have a phone call and an office conference or anything along those lines, you can set an appointment at indianastatemeeting.com.

Here is the fact scenario. I met this person who was a single parent. He split time with his child’s mother. He was a younger guy and he really wanted to be able to take care of his child if something happened to him. This gentleman went out and bought himself a whole bunch of life insurance, but he knew that his child was young and if something happened to him, he didn’t want his Baby’s mother to get access to or control the money.

He thought that the best thing to do would be to have his parents as the beneficiaries of the life insurance with the understanding that they would use the funds to take care of his child. Great idea. No problem with the parents. This is not a story about the parents absconding with the money, but there are some of the consequences that this gentleman would have to think about regarding the life insurance.

Let’s say the unforeseen happens, he passes away, and his child is pretty young.The life insurance money goes to the grandparent. For a while the grandparents go ahead and they’re supplementing the child daily needs, and and they’re going to save some of the money for the child’s college. The grandparents are doing the right thing, but then they go ahead and fall on some bad times and they have a whole bunch of creditors.

If they have this money and this money is not adequately protected, creditors can go ahead and get access to the money, which was really intended for their grandchild. What would happen if the grandparents passed away and they did not have this money protected? In some form of trust, then the monies would go be distributed under the State’s intestacy laws. And not necessarily all the money would go to the grandchild because they had other children.

Even if they had an estate plan, arguably those monies would be divvied up between their children and only a portion would end up going to their son’s child or their grandchild. This outcome was not what Dad or the grandparents intended. The better way to handle this type of transfer, could be to use life insurance to fund a trust when Dad passed away. If the money is put in trust for the child, it would be protected from creditors.

This can be accomplished a couple of ways, either the estate, if you want it to go through a will, would be the beneficiary of the life insurance policy, and a trust would be set up through the will. This is called a testamentary trust.

Hi, it’s Guy DiMartino. I am in Northwest Indiana state planning and probate lawyer. Today I’d like to talk a little bit about life insurance and how it can be an important component of an estate plan. However, you have to really think it through because there can be some consequences that you may not intend. If you have any questions about an Indiana state plan or probate matter, and you’d like to get in touch with me, have a phone call and an office conference or anything along those lines, you can set an appointment at indianastatemeeting.com.

Here is the fact scenario. I met this person who was a single parent. He split time with his child’s mother. He was a younger guy and he really wanted to be able to take care of his child if something happened to him. This gentleman went out and bought himself a whole bunch of life insurance, but he knew that his child was young and if something happened to him, he didn’t want his Baby’s mother to get access to or control the money.

He thought that the best thing to do would be to have his parents as the beneficiaries of the life insurance with the understanding that they would use the funds to take care of his child. Great idea. No problem with the parents. This is not a story about the parents absconding with the money, but there are some of the consequences that this gentleman would have to think about regarding the life insurance.

Let’s say the unforeseen happens, he passes away, and his child is pretty young.The life insurance money goes to the grandparent. For a while the grandparents go ahead and they’re supplementing the child daily needs, and and they’re going to save some of the money for the child’s college. The grandparents are doing the right thing, but then they go ahead and fall on some bad times and they have a whole bunch of creditors.

If they have this money and this money is not adequately protected, creditors can go ahead and get access to the money, which was really intended for their grandchild. What would happen if the grandparents passed away and they did not have this money protected? In some form of trust, then the monies would go be distributed under the State’s intestacy laws. And not necessarily all the money would go to the grandchild because they had other children.

Even if they had an estate plan, arguably those monies would be divvied up between their children and only a portion would end up going to their son’s child or their grandchild. This outcome was not what Dad or the grandparents intended. The better way to handle this type of transfer, could be to use life insurance to fund a trust when Dad passed away. If the money is put in trust for the child, it would be protected from creditors.

This can be accomplished a couple of ways, either the estate, if you want it to go through a will, would be the beneficiary of the life insurance policy, and a trust would be set up through the will. This is called a testamentary trust. Also, the Dad could have set up a trust while he was alive, and the trust would be funded by the life insurance proceeds when he passed away. The Dad could still have the grandparents as trustees, but it doesn’t mean that that’s the grandparent’s money. So then if something were to happen where they would have creditors, creditors would not be able to attach those funds.

Also, if the grandparents passed away, then the successor trustee would be able to manage the funds for his child. So great idea, really thinking, but sometimes we have to think it all the way through, and that’s what lawyers do. If you have any questions about a Michigan City or LaPorte Indiana estate plan or probate matter, you can always give me a call.

Also, the Dad could have set up a trust while he was alive, and the trust would be funded by the life insurance proceeds when he passed away. The Dad could still have the grandparents as trustees, but it doesn’t mean that that’s the grandparent’s money. So then if something were to happen where they would have creditors, creditors would not be able to attach those funds. Also, if the grandparents passed away, then the successor trustee would be able to manage the funds for his child. So great idea, really thinking, but sometimes we have to think it all the way through, and that’s what lawyers do. If you have any questions about a Michigan City or LaPorte Indiana estate plan or probate matter, you can always give me a call.