What is typically required regarding a minor beneficiary?

In the context of insurance and beneficiary designations, when a minor is named as a beneficiary, specific legal considerations come into play. The option stating that a guardian must be appointed in the beneficiary clause is correct because minors are not legally able to manage funds themselves.

When a death benefit is intended for a minor, it is essential to ensure that the proceeds are administered safely and appropriately. Appointing a guardian allows for an adult to oversee the funds and use them for the benefit of the minor until they reach an age where they can manage the money themselves effectively. This measure protects the interests of the minor and helps prevent potential misuse of the funds meant for their benefit.

The other options present scenarios that do not align with standard practices regarding minors as beneficiaries. Holding death proceeds in trust until a certain age, while it can be a viable approach, does not usually require a guardian to be specified in the beneficiary clause as a prerequisite. The suggestion that a minor must pay debts from the estate is also unfounded, as a minor is not legally responsible for such debts. Lastly, minors do not have the legal capacity to receive death proceeds directly, further emphasizing the need for a responsible adult to be appointed to manage any funds on their behalf.