Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jun 11, 2010

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Insurance Question from Grey Cloud Island, MN

Asked on 06/11/2010

How can I prevent my 2 adult daughters from mismanaging life insurance proceeds? I would like my life insurance beneficiaries to receive a specified amount per month, rather than a lump sum payment. How do I set this up? Please advise. Thank you!

Answer given on June 12, 2010

It’s relatively to set up this type of arrangement.  You would need to talk to a banking rep, a financial advisor or an attorney and set up a trust, with the provision that the trust pays out X dollars per period to the beneficiary upon your death, with the proceeds from the life insurance going to the trust fund.  

There are different types of trust funds you can establish, so make sure you know what you are trying to accomplish and how a particular type of trust fund will do this for you. I think what you are looking for is a "testamentary fund" or a "spendthrift trust". My parents have the latter set up for one of my siblings, as they are not very good at handling money over time.  Makes it easy for them to stay afloat and is protected from creditors.

 

Good luck!

 

 


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