[WSBAPT] Life Insurance for Minor Beneficiary

Wed Dec 7 10:23:48 PST 2022

Thanks Roger and others replying to me to teach me a world of truly “blocked” accounts I’m so fortunate not to have encountered yet – have I mentioned I love trusts? 😉

But everything comes in 2s for me it seems. So now that I have one “minor child with grandparents trying to figure out how inexpensively to collect deceased son’s few assets for grandchild,” I’m fully expecting this to happen in the coming months.

And I have YOU ALL to thank when it does. Best, Josh

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Roger Hawkes
Sent: Wednesday, December 7, 2022 10:48 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Life Insurance for Minor Beneficiary

In the usual lexicon, ‘blocked account’ means usable only upon court order.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Joshua McKarcher
Sent: Wednesday, December 7, 2022 9:17 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Life Insurance for Minor Beneficiary

In these emails “blocked account” means UTMA account with an adult custodian holding for benefit of minor, and not some non-UTMA account that is “blocked” from being used AT ALL . . . . right? I am learning (as revealed by my earlier posts re similar issues). Thanks, Josh

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Marcus J. Fry
Sent: Wednesday, December 7, 2022 9:33 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Life Insurance for Minor Beneficiary

Brent:
Actually a court order specifically authorizing and directing the insurance proceeds to be paid to a custodian in my experience has worked just fine.  I agree requiring the custodian to place those funds into a blocked account subject to court order is a level of protection that should be done when there wasn’t a Will appointing the custodian.  In my experience, the standard demand letter you got from the life insurance co was just a form, but if they get a certified copy of a court order the insurance company does what the court order tells them to do, again in at least my experience anyway.

-Marcus

Marcus J. Fry
Attorney | Witherspoon • Kelley
mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com> | Attorney Profile<https://www.witherspoonkelley.com/marcus-j-fry> | vCard<https://www.witherspoonkelley.com/s/mfj.vcf>

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Brent Williams-Ruth
Sent: Tuesday, December 6, 2022 5:23 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Life Insurance for Minor Beneficiary

I have no problem with 11.114, have done that and expected that it would go into a blocked account.

I have just never had anyone REQUIRE a full conservatorship appointment.

Total amount of the benefit is $7,500.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

**EFFECTIVE IMMEDIATELY** All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA 98063

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Direct: (253) 285-7453

e-mail<mailto:Brent at Williams-RuthLaw.com> / website<https://link.edgepilot.com/s/408aed5b/gnpHvqQCKEy_4ATZtPUw9w?u=http://www.williams-ruthlaw.com/> / facebook<https://link.edgepilot.com/s/8e7f7af6/ADAXRvLLRkGgnwcchf-n9Q?u=http://www.facebook.com/bwrlaw> /

On Tue, Dec 6, 2022 at 5:13 PM Nick Pleasants <npleasants at ohswlaw.com<mailto:npleasants at ohswlaw.com>> wrote:
Brent,
That is business as usual. The surviving parent is not automatically the child’s conservator for purposes of claiming insurance benefits. I have done lots of minor conservatorships for life insurance of a deceased parent. It’s pretty streamlined so you don’t need a CV Report. Under the old law, I could get the parent appointed simultaneously with filing the Petition. I think it should be similar under the new law, but haven’t filed one since Jan 1, 2022. Sometimes you can get the life insurance company to accept appointment of a custodian under 11.114, sometimes they refuse.
There are some important protections in conservatorship, which depending on the size of the funds, make complete sense. The conservator is going to be required to block the funds in excess of $3,000 or obtain a bond. Absent extenuating circumstances, the money should stay blocked until the child’s 18th birthday. Generally life insurance funds will not be used to pay for minor child’s care because whoever is raising the child can claim the social security benefit for the child. I actually think this works really well because otherwise surviving parent may be tempted to spend it.
Best,
Nick

Nicholas Pleasants | Shareholder

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11225 SE 6th Street | Suite 100 | Bellevue, WA 98004
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Brent Williams-Ruth
Sent: Tuesday, December 6, 2022 3:07 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>
Subject: [WSBAPT] Life Insurance for Minor Beneficiary

Listmates -

I have a situation where my Executor has been told by a National Life Insurance carrier that we need “certified guardianship/conservatorship papers for the estate of the minor including Letters of Guardianship/Conservatorship and the supporting Court Order appointing the guardian/conservator.”

I am used to getting an order for custodian transfer under 11.76 and 11.114....but I am curious as to their demand for a guardianship/conservatorship when the surviving spouse is also the biological parent of the minor beneficiary.

Appreciate thoughts and insights.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

**EFFECTIVE IMMEDIATELY** All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA 98063

Office/Scheduling Phone: (253) 285-7751

Direct: (253) 285-7453

e-mail<mailto:Brent at Williams-RuthLaw.com> / website<https://link.edgepilot.com/s/408aed5b/gnpHvqQCKEy_4ATZtPUw9w?u=http://www.williams-ruthlaw.com/> / facebook<https://link.edgepilot.com/s/8e7f7af6/ADAXRvLLRkGgnwcchf-n9Q?u=http://www.facebook.com/bwrlaw> /
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