if you are appointed beneficiary for a structured settlement of a minor, does that change when he becomes 18?
Posted by MarkMay 23
I have a friend who’s son was receiving monthly payments set up through a structured settlement, as the result of losing his mother in a car accident. At the time the structured settlement was set up, the son was a minor, so my friend, his father, automatically became benificiary of the settlement. Now the son was killed 2 months ago in a car accident at the age of 19. My friend, his father, has been contacted by the insurance company about the remainder of the settlement. My friend filled out some papers and sent to the insurance company. They contacted him again and told him that when his son became 18, that he was no longer beneficiary, and that no one was because the son never appointed one after he turned 18, and now the remainder of the settlement would go to an estate for the son. And now he has to go pay a bunch of money that he does’nt have to Probate Court, just to get his son’s settlement, in order to finish paying funeral expenses, and such. Is this true?
It deepens how long he had been 19 before the accident.
Please accept my sad condolences for your friends’ tragedies.
It is not clear what the "structured settlement" was. If it were a trust, then it depends on the type and terms of the trust. If it were by contract, then it depends on what the terms of the contract are. I take it that no contingent beneficiary was ever named, which is most unfortunate. Please inquire about "contingent beneficiaries" and see what the insurance company has to say.
The way to have avoided this would have been to have had a contingent beneficiary named, and to have put the son’s assets into a trust. Probate is usually problematic and tends to be expensive.
Again, my profound sympathies.
This information is provided for your information, and is not a substitute for the advice of a lawyer.
What an awful situation. Unfortunately if his sons mother did not name a contingent beneficiary to the settlement (probably an Annuity Settlement) then it has to go through his estate and any creditors or people the 19 year old may have owed money to will have right to tie this money up in probate for quite a while. Most probate attorneys will provide services and take their fees from the estate upon settling probate. Annuities and Life Insurance avoid probate and high attorney fees, however with no contingent beneficiary named by the mother or the son, there is no way around the nightmare of probate. If no one contests or claims on his estate it should go fairly quickly. The funeral home can be paid in payments until the estate is settled, or they may do an assignment of benefits upon the estate being settled and then they get their money from the estate. Hope this helped