What should a single parent do with the life insurance proceeds of their child’s other parent?
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UPDATED: Sep 15, 2020
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If your child’s other parent makes you the beneficiary of their life insurance policy and they pass away, there are many things you can do. If you are still providing full time financial support for the child and the child is a minor, you might consider having some of the funds put into a trust with you as trustee, and some of the funds in a bank account specifically set up for educational and other expenses. This way you can provide support to your child out of the death benefit while they are a minor and give them the remainder when they are of age. You can also set up a college savings account for your child with some of the proceeds. If your child is no longer a minor, then you should consider either giving them the money outright (consult a tax advisor about potential gift taxes) or setting up a trust account for them until they reach an age at which you think they will be responsible enough to handle the proceeds.