Why You Should Not List a Minor as a Beneficiary
- Ashley Sharek
- 2 days ago
- 4 min read
Many parents or grandparents list minor children as beneficiaries on life insurance, retirement accounts, or investment funds thinking they are making a wise and loving decision. While the intention is good, the outcome can be very different from what you expect. If a minor inherits assets directly, it can trigger court involvement, delay access to those funds, and result in someone else managing the money instead of you.
If you live in Pennsylvania and have minor children or grandchildren, this article will help you understand why naming them as beneficiaries without a legal plan is risky—and what you can do instead.
What Happens When a Minor Inherits Money Directly
In Pennsylvania, a minor cannot legally control or manage financial assets. When a minor is named as a direct beneficiary, the court steps in. A judge will appoint someone to manage the funds on the child’s behalf until they reach legal adulthood, which is age 18 in Pennsylvania.
This creates three serious challenges:
You do not choose who manages the money
Court involvement adds cost and delay
Your child receives full control of the money at age 18, with no restrictions
Most parents would prefer to delay inheritance until their child is more financially mature.
Risk 1: The Court Appoints a Guardian You Did Not Choose
When the court gets involved, it appoints a financial guardian to oversee the minor’s assets.
That person might be someone you do not trust or someone who does not share your values. It could even be a stranger.
You lose the ability to ensure that your child’s inheritance is managed with care and according to your wishes.
Risk 2: Court Oversight Is Expensive and Time-Consuming
The court may require the guardian to file annual accountings and get permission for how money is spent. These filings take time and may involve legal or administrative fees.
This can reduce the total inheritance available for your child and cause unnecessary delays during a time of loss.
Risk 3: Unrestricted Access at Age 18
Once your child turns 18, they receive full control of any inherited funds. Most 18-year-olds are not financially prepared to manage large sums of money. The inheritance could be spent quickly, misused, or even lost to outside influences.
If your goal is to provide lasting security for your child, this default approach does not offer the protection or structure they need.
A Better Solution: Kids Protection Planning
There is a smarter and safer way to leave assets to your children. Kids Protection Planning is a legal strategy that allows you to stay in control of your child’s future, avoid probate court, and ensure your chosen guardians are in charge.
At Entrusted Legacy Law, we help families in Pennsylvania create customized plans to protect their children’s financial and emotional well-being.
What Is a Kids Protection Plan?
A Kids Protection Plan is a set of legal documents and instructions that:
Names legal guardians for your child, both short-term and long-term
Establishes a trust to manage money until your child reaches a responsible age
Keeps the court out of the process
Puts you in charge of who manages your child’s money and when they receive it
This plan can be designed to reflect your values and goals, while offering practical protection for your child if something happens to you.
Why a Trust Is Key to Protecting Minor Beneficiaries
One of the most effective tools in a Kids Protection Plan is a revocable living trust. This trust holds the inheritance and appoints a trustee—someone you choose—to manage the funds.
Here is how it works:
The trust can be activated immediately or upon your passing
The trustee uses the funds for your child’s education, health care, and living needs
You decide when your child receives full control—such as at age 25 or after graduating college
The trust avoids court involvement completely
This approach gives your child guidance and protection, not just a lump sum.
Real-Life Example: What Happens Without a Plan
A couple in Erie listed their ten-year-old son as the beneficiary on their life insurance policies. They believed they were doing the right thing. However, if something had happened to them, the money would have gone through probate, and the court would have appointed a financial guardian.
That guardian might not have been someone they trusted. Once their son turned 18, he would have inherited the entire amount with no restrictions. No financial advice. No oversight. No long-term plan. This is exactly the kind of avoidable outcome that Kids Protection Planning is designed to prevent.
What Happens When You Plan Ahead
With the right legal plan in place, that same couple could have created a trust and named a trustee they knew and trusted. They could have chosen guardians for their son and provided clear instructions for how the money should be used.
This plan would have ensured:
No court delays
No unwanted guardians
No financial chaos at age 18
Instead, their son would have had the support and protection his parents intended all along.
Why This Planning Matters Now
We often hear from families who say they will plan later, when their children are older. The truth is that accidents and illnesses can happen at any time. If you wait too long, you risk leaving your child without a safety net.
Planning now gives you peace of mind and puts a structure in place that protects your child, your legacy, and your intentions.
How Entrusted Legacy Law Can Help
At Entrusted Legacy Law, we take a friendly and heart-centered approach to estate planning. We do not wear suits. We do not bill by the hour. We do not make things confusing or overwhelming.
We provide flat-fee legal planning services for families in Pittsburgh, Philadelphia, and Erie. Our team will walk you through every step of the process so you feel confident and supported.
We specialize in:
Kids Protection Planning
Revocable Living Trusts
Naming Legal Guardians
Medicaid Asset Protection
Special Needs Planning
Probate Avoidance
Our goal is to help you protect your children and secure your legacy in a way that feels personal, responsible, and clear.
Take the Next Step
If you have listed a minor as a beneficiary on any account, now is the time to review your plan. A legal strategy can help you avoid court, protect your child’s inheritance, and ensure that someone you trust is in charge. Schedule a free consultation with Entrusted Legacy Law and let us help you put the right plan in place.
Visit the link below to book your call:
