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Have you reviewed your beneficiaries lately?
You may have heard horror stories of officers who divorced and never changed their insurance policies, deferred comp beneficiaries or es-
tate plan, and the ex-spouse got it all. It is
easy when hearing dramatic stories to as- sume that you are safe. But are you?
A trust protects the funds outside of probate. The minor can receive distributions before age 18 for health, education and welfare at the discretion of your chosen trustee. You
choose the final distribution age.
Beneficiary financial troubles
No matter what age you feel is appropriate for your beneficiaries to receive their inheritance, there is no way of knowing whether they will be going through a di-
vorce, bankruptcy or lawsuit at the time of your death.
If you name your living trust as beneficiary, the trust protects against all those risks. A trust’s spendthrift provision prevents
any creditor or spouse from claiming the gift of your estate.
Beneficiary disability issues
Suppose one of your beneficiaries acquires a disability through accident or illness before your death. In that case, your estate funds will go to the government for reimbursement of public benefits, or your beneficiary will lose their SSI or Med- icaid benefits.
You can prevent this from happening with a living trust that has precautionary supplemental needs provisions.
Living trusts
At the end of your life, or at incapacitation, if you have prop- erty or bank accounts in your name, they risk probate.
• A will must be probated. The rule is that no one can le- gally sign your name. Therefore, all assets in your name are subject to the probate process, which averages 18 months and is costly.
• A living trust completely avoids probate.
• Your financial accounts, life insurance policies and de-
ferred compensation accounts can name your living trust as beneficiary, subject to essential tax consider- ations.
• A living trust estate plan includes both health care and financial power of attorney documents. It also consists of a last will and testament. A will is necessary for guard- ianship of minor children. It also transfers assets in your name out of probate.
Call my office today to lock in your FOP 33 percent reduced rate for a complete Living Trust Estate Plan.
Police Benefits Plan
For an expanded presentation of asset protection strategies and marketplace discounts, visit and register with the Police Benefits Plan on the link below. Receive regular updates on strategies to protect what you have earned and save money with police discounts on products and services. Registration for FOP members and families is free.
Visit or call 312-559-8444 for as- sistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Ben- efits Plan. He has been a police lawyer for over three decades. His father was a CPD detective, and his grandfather was CPD Chief of Major Investigations. You can reach Tom at 312-559-8400.
   There are various reasons why your list- ed beneficiaries might not fit your current intentions or may prove costly because of cir-
cumstances beyond your control.
Outdated beneficiaries
It is very common to have beneficiary names listed on poli- cies and accounts that are not current to your wishes. Chances are, you have beneficiaries listed right now you that no longer wish to receive the benefit, or your list excludes someone that you do want to benefit.
Here are some examples:
Previous marriages. That’s an easy one. However, please know that when you die, the beneficiary on any legal document will receive the proceeds of that policy, account or estate plan. I have had phone calls from surviving spouses who discovered the ex on policies after their spouse died.
Not listing all your children. You took out the insurance pol- icy years ago before having that second or third child.
Intentionally listing only one child. You figure that child will take care of their siblings. That mistake is widespread. How- ever, the child you list has legal ownership. What if the child’s spouse has different ideas? Or before making distributions to siblings, the beneficiary child dies. All the funds are now part of that child’s estate. The funds could end up in the beneficiary child’s divorce, lawsuit or creditor claim. Then there are possi- ble gift taxes when making distributions, depending on the tax code at the time.
Countless clients were in one of these or other situations as we reviewed their assets and policies during their living trust signing. Fortunately, they were still around to fix it.
Minor children beneficiaries
Suppose you have listed a minor as a primary or successor beneficiary on a policy or account. Unfortunately, you may die before the minor reaches 18 years of age. If so:
• If you die before the minor reaches age 18, all proceeds will go to probate. The assets stay under the court’s con- trol until the minor turns 18.
• Secondly, not many people want their children to receive large sums of money at 18, when probate will release it all. Eighteen may be the age of majority; however, it is rarely the age of maturity.
One of my favorite truths is that the human brain does not fully form until age 25. Everything is there except the frontal cortex, which governs reason — and that explains a lot. That fact should also inform your decision about the final distribu- tion age of all funds. A living trust best accomplishes a sensible distribution strategy.
Benefits Plan

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