Must guardianship be started when minor child is beneficiary of life insurance policy?


Denny: Hey. Thanks for taking my call. I have a question. My mother passed away recently and she had left my son as beneficiary of her life insurance policy. 

Atty. Tom Olsen: Alright. 

Denny: Of course, she had no will and because my son is a minor, I had power of attorney when she was alive and I’d receive the payment for my son but the payout amount that they’re saying we get and what I show at the death benefit of the policy are two very different amounts of money and they won’t tell me anything about it because I’m not the executor of the will. I’m really not sure what to do next about it to find out what’s going on with that.

Atty. Tom Olsen: Well Denny, let’s back up for a minute. How old is your son?

Denny: He’s sixteen. 

Atty. Tom Olsen: Denny, under the Florida law, you as a natural parent to your son, can hold up to $7,500 I believe without a guardianship. Is the sum of money going to exceed that amount?

Denny: I believe it’s supposed to.

Atty. Tom Olsen: Okay. Because you may have to setup a guardianship for your son in order to receive those funds. If you had to setup a guardianship for your son, once you are appointed legal guardian for your son for this money, that would be the legal authority you need to deal with the insurance company to find out the answer to this question. 

Denny: But they won’t tell me. They’re saying they need the executor of her will to discuss it and I said, “But there was no will.”

Atty. Tom Olsen: And I’m telling you that there’s an alternative to that, Denny.

Denny: Okay. 

Atty. Tom Olsen: Yes, we could go to court and have you appointed as the executor but you know what? You’re going to pay a few thousand dollars for that. We don’t want to do that if you don’t have to, right?

Denny: Okay. Right.

Atty. Tom Olsen: What I’m saying is what you may have to do is a legal guardianship to get access to these funds to begin with and as legal guardian, they would speak to you. This is just another route to get this information that you need. 

Denny: Okay. Perfect. So, they can disclose things about the policy to me because I am the legal guardian of the beneficiary. 

Atty. Tom Olsen: No, you’ve misunderstood me. A natural parent in the State of Florida can hold up to $7,500 for their minor child without a legal guardianship being established.

If the amount of money exceeds that, so for example, if your child is in an automobile accident, they’re going to award him $50,000. They will not just write a check to you, mom. They will make you establish a legal guardianship, have you appointed as a legal guardian over this money on behalf of your child, and then they will pay it to this legal guardianship. 

If the sum of money that you’re going to get from this insurance policy exceeds $7,500, you are going to have to establish a legal guardianship with the court and as legal guardian, you will then have the authority to talk to the insurance company. 

Denny: Okay. Because the problem they’re saying we’re only getting $400 but yes, I showed the death benefit it says $7700 and that’s why they said you have to be the executor of the will, they’re giving me a whole runaround. So, I need to establish guardianship even though they’re saying the amount is so much less than what I’m showing them on the policy? 

Atty. Tom Olsen: Well, they are prepared to write you a check for $400, is that what you’re telling me, Denny?

Denny: Well, yes. But I have the paperwork to show the actual value of the death benefit is $7700. 

Atty. Tom Olsen: Well, there’s no way that I can explain to you over the radio because I don’t know why that difference is, Denny. But I think we’re going by as far as we can go with it today. I don’t have any easy solutions for you, unfortunately, Denny.