life insurance question

Veneer

two questions with regards to life insurance (background: I am married, two young children, mortgage free)

1) what is the best kind of trust fund to put a life insurance payout into (for the children).
2) what is the best (safest) way to save/invest a life insurance payout - what do people typically do?

n.b. just want to organise things so they are has hassle free as possible for my family if the scenario were to arise!

DullGreyGuy

It depends, let's say you were to die tomorrow... what do you want happen? Kids get all the money when they turn 18? 21? Your widow(er) is unable to touch the money in any way? Or can they spend it whilst the kids are under age? Any limitations? Holidays? Education? Bigger house? Bigger house with their new partner? What if they're pregnant when you die? Does kid 3 get anything?

Most trust their trustees and go with a discretionary trust and have a letter of wishes to instruct the trustees on how the trust should be used. Others dont trust their partners etc and so have an absolute trust to their kid meaning they get access to it on their 18th birthday but means kid number 3 who is conceived after the trust is created gets nothing.