Can I minor draw against an inheritance?

2 answers | Last updated: Jul 21, 2016
Sjwolfe asked...

My son, who is now 10 years old, was left a life insurance policy from my father. We are at a point of losing our home, and I need to find out if we can draw funds against that policy to get us out of this nightmare.

Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

I assume from your question that your ten year old son was named as the beneficiary of your father's life insurance policy rather than having a trust with your son as the beneficiary of the trust be designated as the beneficiary of the life insurance policy.

In this case because your son is a minor, his guardian is charged with the duty to manage the funds on his behalf. Your situation presents a critical question as to a potential conflict of interest. While it is certainly in your son's best interest to continue to be able to live in your home, to apply some or all of the life insurane proceeds toward preserving an asset that is not owned by your son would not be considered to be to his financial benefit.

However, it may be possible for you to borrow the money from your son at a reasonable interest rate. It would be advisable if you were to consider this as an option to get court approval for this loan.

Community Answers

Geo2015 answered...

This is a good article, and quite rare -- I don't see much out there addressing inheritance issues as they involve or affect minors... in this case a ten year old child. As a consultant, in my opinion, Mr. Weisman's advice is about as good as it gets for that type of situation. Cashing out any asset going to a minor, by an adult, isn't really encouraged on any level. And rightfully so, I think, as a lot of children would be taken advantage of otherwise... and have been in the past. So many adults, that I have seen, have tried to use their child's inheritance to get an advance on the inheritance, to pay bills or whatever -- but probate loans, inheritance advance loans, probate advances or inheritance loans are never approved for a parent trying to borrow against their child's inheritance. Even if the effort appears to be in the child's best interest, even a teenager up to 18 or 19 or 20 in fact, and seems to be sincere on the part of the parent -- established probate loan or inheritance advance, or estate loan companies like, or, or well known estate advance and probate cash advance firms like, and others, just do not want to approve probate loans or inheritance cash advances for parents of minors who are heirs of estates in probate or trust, expecting an inheritance. No matter how much the parent pleads, those firms will not approve a minor for an inheritance loan or trust fund loan, or probate advance assignment. even if it's only $5,000 or $10,000. The concern is for possible negative bounce-back later on, should the probate loan or inheritance advance loan not be returned to the child, or whatever the case may be. The inheritance advance and probate loan firms say they hate to say no, but that this policy is in place for very good reasons.