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Can a Minor Be Named as a Beneficiary to Avoid Probate?

Troy Werner and his family

Written by Troy Werner

Troy Werner has been an indispensable asset to The Werner Law Firm since joining in 2009, providing exceptional legal service to its clients.

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POSTED ON: August 29, 2023

You can’t name a legal minor as a beneficiary. This applies to almost all legal documents, most notably wills and life insurance policies.

The significant exception to the rule of not naming a minor as a beneficiary is trusts: you can name a legal minor as the beneficiary of a trust. That’s important because if you want to leave assets to a minor, a trust is the way to do it. This is the way in California to avoid hiring a probate lawyer and avoid probate court.

Yahoo Finance’s recent article entitled, “Can I Name a Minor as a Beneficiary?” points out that it’s important to know that property and estate laws are highly state specific.  Probate in California is very different, and more involved, than other states. Therefore, consult a local probate attorney before making any decisions regarding your money and estate planning.

Several legal documents can name someone as the beneficiary of any underlying assets. A beneficiary is the third party who receives some benefit from the document, typically in the form of financial or other property assets.

Four primary types of documents can name a beneficiary when it comes to estate planning:

  1. Wills: In a last will and testament, a beneficiary is the person the will names to receive assets from your estate.
  2. Life Insurance: Here, a beneficiary is an individual who receives a payment from the life insurance policy after the policyholder's death.
  3. Retirement Accounts: A beneficiary in a retirement account is someone who receives the assets in the account after the death of the account holder.
  4. Revocable Living Trusts: In a living trust, a beneficiary gets assets from the account based on the terms of the trust and the trustee’s management.

Under most circumstances, a minor can’t receive assets as a beneficiary. The major exception to this is also living trusts. Minors can be named as beneficiaries of a trust because the beneficiaries of a trust don’t participate in contractual or financial transactions.

Because minors cannot participate in financial transactions or handle legal matters, they can’t get assets through contracts and legal documents. They can’t directly inherit through a will, nor can they receive assets through a contract, such as a life insurance policy or a retirement account.

The goal is to be able to set up your estate plan in such a way that minor beneficiaries can inherit as you intend them to: in a planned manner. Needing to go into probate court and incurring the cost of a probate lawyer is not anyone's goal.

If you need help in setting up your estate plan to avoid probate, or if you are dealing with a probate case, we are always happy to help.  Our Los Angeles area probate lawyers in Los Angeles can guide you through it.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Yahoo Finance (June 19, 2023) “Can I Name a Minor as a Beneficiary?”

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