Mission: Family: Protect your children’s financial future — in writing - Navy Community, Navy Spouse and Family Resources - Navy Times

Mission: Family: Protect your children’s financial future — in writing

Sometimes we must force ourselves to take care of unpleasant tasks — like planning for the financial future of our children in the event of an untimely death.

Who should you trust to make sure your minor child’s money is wisely used? Put some thought into this; otherwise, you could be setting your family up for even more heartache.

Consider the case of a soldier who died in Iraq in 2005. His ex-wife was sentenced in January to three years in federal prison for embezzling nearly $363,000 of his life insurance payout, intended for their young son. It’s unlikely the soldier wanted the money spent on Las Vegas vacations, restaurants and nightclubs, cars for relatives, and his ex-wife’s former boyfriend. But that’s what happened.

“All my brother wanted was for his son to have stability,” said Shannon Austill, sister of Army Spc. Jeffrey Stuart Henthorn. “I don’t think my brother had any idea she’d have access to this money. If he had, he would have set things up differently.”

Henthorn had designated his son, now 11, as beneficiary of his Servicemembers’ Group Life Insurance policy. But, like many troops, he stopped there.

In order to receive the death benefits on behalf of her son, Henthorn’s ex-wife, Trisha Fish, had to be appointed by a court as guardian of the minor child’s estate or property. Fish, a Native American, filed a petition for guardianship in the Tribal District Court for the Kickapoo Tribe of Oklahoma.

There was no one monitoring how the $400,000 in SGLI money was spent — unlike in state courts, which require guardians to account for funds spent. Even Fish’s attorney said the money shouldn’t have been put in her hands.

Don’t let it happen to you

When minor children are involved, SGLI money can be paid only to a court-appointed guardian. But once the money is paid, the company that administers the SGLI program has no further responsibility. And as this case shows, just because a guardian is appointed by a court doesn’t mean that guardian will handle the money responsibly.

Why leave this decision up to a court? Plan now for the child’s best interest. The guardian can be a trusted family member who is good at handling money, but he also can be an attorney or financial institution.

In fact, reputable institutional guardians may have more at stake in ensuring your wishes are honored, because their reputation is on the line. They also make it their business to know the laws concerning these matters.

Check with your military legal assistance office for help in setting up a plan or for a referral to a civilian attorney.

One option is to designate a trustee for a minor beneficiary. Your attorney can help you create a trust for the benefit of the minor, in your will or as a regular trust.

———

Karen Jowers is the wife of a military retiree. E-mail her at kjowers@atpco.com.