Episode
Why You Shouldn’t Name Minor Children As Beneficiaries
- Published
- Apr 30, 2026
- Duration seconds
- 562
- Processing state
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Summary
Parents buying life insurance or opening retirement accounts usually want to name their children as beneficiaries (typically as a contingent beneficiary after a spouse). It feels like the obvious choice — if something happens to you, the money should go to your kids. But naming a minor child directly as a beneficiary is one of the most common and disruptive estate planning mistakes a parent can make, and it can tie up the very money your family needs most during an already difficult time. The problem is odd: minors cannot legally enter contracts in most states. A bank account is a contract with the bank. A brokerage account with the broker. Minors typically have to have a parent (or guardian) to open said account. And if parent is gone, it gets tricky. When a life insurance company or retirement plan custodian tries to distribute funds to a child under 18, it can hit a legal wall. The money can’t be released. And what follows is a court process that no grieving family should have to navigate.