[WSBAPT] Life insurance company requires parent of minors to be appointed guardian

Mon May 18 15:28:54 PDT 2015

I have done what Marcus suggested below, and have never had a problem.  I think that the insurance companies do not want to read and interpret laws, but they are willing to comply with court orders that appoint custodians for UTMAs, or appoint trustees, or appoint guardians.  I do notice the insurance company, and my order includes language that directs the insurance company to distribute to the custodian.

Jill H. Sasser | Attorney at Law
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Monday, May 18, 2015 12:57 PM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Life insurance company requires parent of minors to be appointed guardian

I have got the push back, but have sent them the UTMA statute and it worked just fine.  Why doesn’t the PR simply petition for an order directing insurance co. to distribute to custodian FBO child under UTMA and serve notice to insurance co. for hearing on the petition.  Let insurance company show up and argue that a gship is necessary.  One could even use TEDRA if they wanted.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Adoption Attorney*
P.O. Box 1689
Yakima, Washington  98907
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Monday, May 18, 2015 11:48 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Life insurance company requires parent of minors to be appointed guardian

I've encountered Marketa's problem too, and always established a guardianship. Ch. 11.88 RCW has special provisions that eliminate a lot of the hassle if the sole basis for the guardianship is that the minor is a minor.

But I also think it's silly and I am annoyed at insurance companies that require this. Does anyone know what the legal basis is? Is it contractual--does the policy specify that payments to a minor will only be made to a court-appointed guardian? If that's not it and they're just being officiously risk averse, I wonder if a court order requiring payment to a UTMA custodian would suffice, followed by order of contempt if they fail to comply. I've just never had a client willing to tilt at that particular windmill.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John J. Sullivan
Sent: Sunday, May 17, 2015 4:05 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Life insurance company requires parent of minors to be appointed guardian

I've always had to establish a guardianship.

There is one alternative, however. You can leave it in the policy until the minor reaches 18. It earns statutory interest. My recollection is the interest rate is quite high, especially compared to today's returns.

I maybe wait until the kid is 17 1/2 to establish the guardianship, assuming the money isn't needed.

John Sullivan

Sent from my iPhone

On May 17, 2015, at 3:24 PM, Lisa Schuchman <lisa at lisaschuchman.com<mailto:lisa at lisaschuchman.com>> wrote:
I tried this argument once with a life insurance company and a guardianship is required, but no GAL.

Lisa E. Schuchman
206-325-2801
www.lisaschuchman.com<http://www.lisaschuchman.com>
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marketa Vorel
Sent: Sunday, May 17, 2015 12:31 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Life insurance comapany requires parent of minors to be appointed guardian

Dear Listmates,

I have very little experience with guardianship of minors and the case law seems a bit thin on this issue.  Is a surviving parent of minor children required to undergo guardianship proceedings in order to manage the minors' assets?
The client is mother of two minor beneficiaries on a life insurance policy established by her deceased spouse (the insured).  The life insurance company demands "guardianship papers for the finances of minor beneficiaries" before pay out.

Client and deceased were a legally married (same-sex), client adopted both children at birth and has been their legal parent since then.

The insured also appointed client as the children’s guardian in her will and established a testamentary trust under which any funds due to the minors shall be received and administered.  The insured’s will has been admitted to probate and its provisions are irrevocable and in full force and effect.

UTMA/RCW 11.114.050, seems to give authority for client to receive and manage the proceeds of the insurance policy without further court proceedings.  Specifically, the statute provides that transfers will be “authorized by a will if the testator has nominated a guardian under RCW 11.114.030 to receive custodial property” and that a “custodian nominated under that section shall be a person to whom a transfer of property of that kind may be made under RCW 11.114.090.”

AIG refuses to budge and insists on a court appointed guardian.  It seems like the issue of a parent being the de-facto and automatic guardian would be a settled one, without requiring the surviving parent to go to court to demonstrate guardianship of her own children.  What am I missing?

Thank you in advance for any wisdom,

M.

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Law Office of Marketa Vorel
1520 K Avenue
Anacortes, WA  98221
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