Another common mistake that people make when designating a beneficiary is to directly name a minor child.
The volunteers's desire to have a death benefit paid to a minor child is not the mistake at all - it is a fine idea to want to leave something to a child, niece, nephew or grandchild (for example). The mistake is directly naming the minor directly.
Typically (although I'm not aware of an exception) a death benefit cannot be paid directly to a minor. When a minor is named as the beneficiary, the death benefit is usually paid to the minor's legal guardian for the benefit of the minor. When that happens, there is little control (if any) over how the legal guardian will use the funds for the benefit of the minor. Or, it is possible that the benefit will be held and not paid until the minor reaches the age of majority.
If you would like to name a minor as a beneficiary, it is best to see an attorney and have a proper trust established for the benefit of the minor. You select a trustee that is then charged with authorizing the use of the money for the benefit of the minor. The legal guardian must petition the trustee for funds, and provide sufficient evidence that the funds will be used for the benefit of the minor. Of course this too adds a level of complexity to the process, plus the expense of hiring the attorney. You will have to select a trustee that you are confident will act in the best interest of the minor you are naming as beneficiary (and get that individual to agree to act as trustee at your death).
But if you are not married and have minor children, or would just like to name a minor, you should take the extra step of working with an attorney to ensure the proper trust is established at your death. Otherwise, the death benefit may not be used for the benefit of the minor as you intended.
Please review this with your attorney - this is not legal advice!
Sharing my thoughts and insights on LOSAP, and occasionally other topics.