How can I prevent my 2 adult daughters from mismanaging life insurance proceeds?

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

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...

Full Bio →

Written by

UPDATED: Jun 11, 2010

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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!



IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and AS IS. It has not necessarily been reviewed by the management staff of nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on to represent you.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption