When Minor Children Are A Major Mistake!

Resize image project - 13 October 2026 at 07.20.58

“Good things come in little packages.” So true with diamonds or items of gold. But the adage may also remind us of a more universal truth that the measure of things can’t always be judged by outward appearance or dimension.

Nowhere is this more true than with the beneficiary designation box on life insurance applications.

But unfortunately, whether on paper or online, the small space afforded can also easily minimize the importance of the information sought and discourage important further elaboration, especially concerning contingent beneficiaries.

A common case in point: Married insureds usually list a spouse as primary beneficiary, but then simply squeeze the names of minor children into the next box as contingents.

This can create problems if both parents die when the children are still young:
  • Minor children (the age varies from state to state) are not legally competent to accept the proceeds, so carriers won’t distribute to them.
  • A court proceeding is required to appoint a guardian over the minor’s property to receive the death proceeds.
  • The identity of and the powers the court may award to that guardian may not be what the insured intended.

In this case the simple solution is to name a “custodian” as beneficiary under the state’s Uniform Transfers to Minors Act (UTMA). A contingent custodian can be designated as well. The state’s law describes the custodian’s powers over the use of the funds until they are distributed to the child at majority, usually age 21.

Naming custodians must be accurate, and the wording usually doesn’t fit in the box! Next time your case involves minor children or any extensive beneficiary designation, call us to help you draft completely the terms your client needs. Contact Tom Virkler, JD, Director of Advanced Markets, at tom@cpsadvancedmarkets.com or (706) 614-3796.

For What It’s Worth: Do you ever wonder why Amazon often delivers those little packages inside bigger shipping boxes? It is because “a computer algorithm is used to calculate how boxes stack into delivery trucks like Tetris blocks… [so] sometimes, a larger box is chosen intentionally to fill a specific gap and keep the truck’s cargo stable during transit.”