Minor Beneficiaries in Maryland: What Parents Must Know

What Happened

A Maryland estate planning attorney published a detailed analysis in October 2026 warning parents about a common but consequential mistake: naming minor children as direct beneficiaries on life insurance policies, retirement accounts, and bank accounts. The article, written by Kaitlyn Tauber of Liberty Legacy Law Group, identifies the legal reality that minor children in Maryland cannot legally receive or manage assets on their own. When a parent names a child under 18 as a direct beneficiary without additional planning structures, the result is often the opposite of what the parent intended.

The article walks through a predictable chain of events that follows a direct minor beneficiary designation. Courts step in. A guardian of the property gets appointed. Ongoing supervision and reporting requirements follow. Legal fees accumulate. The process that parents hoped would be simple becomes a prolonged court proceeding. The article emphasizes that this outcome surprises many families, because the instinct to name children directly feels like the most straightforward and loving choice a parent can make.

The attorney also identifies a second problem that surfaces even when court-supervised management goes smoothly. When a child reaches adulthood, assets transfer to them outright and without restriction. At 18Md. Code, Gen. Provisions § 1–401Verified Sep 15, 2026View source years old, a young adult receives full control of whatever funds remain. There are no spending restrictions, no trustee oversight, and no protection from creditors or poor financial decisions. The article argues that structured planning through a trust resolves both problems simultaneously, and it outlines the core elements that make a trust-based approach more effective for families with minor children.

What It Means

For Maryland families, this analysis connects directly to how state law handles assets left to minors. Maryland courts protect minors through the guardianship system, but that protection comes at a cost. Court-supervised guardianship of property requires formal appointment, regular accountings, and judicial oversight until the child reaches 18Md. Code, Gen. Provisions § 1–401Verified Sep 15, 2026View source. The process removes decision-making from the family and places it under court control. A parent who names a minor child directly on a beneficiary form triggers exactly this process, regardless of what a will says. Beneficiary designations on accounts and policies operate outside of probate and override will provisions entirely.

Maryland law does give parents a meaningful tool for expressing guardian preferences. A parent nominates a guardian in a willMd. Code, Est. & Trusts §§ 13–701, 13–702, 13–201, 13–207Verified Sep 15, 2026View source, and the court must appoint the guardian the parent namedMd. Code, Est. & Trusts §§ 13–701, 13–702, 13–201, 13–207Verified Sep 15, 2026View source for the child's person. However, a guardian of the person and a guardian of the property are two distinct roles. Nominating someone to raise your child does not automatically give that person control over the child's inherited assets. Without a trust, those assets fall under court supervision separately. Maryland also provides a limited alternative through the Uniform Transfers to Minors Act, which allows assets to be held by a custodian until a child reaches 21 yearsET §§ 13-301, 13-320Verified Sep 15, 2026View source. That age cutoff still delivers a lump sum to a young adult, which many parents find unsatisfying as an endpoint.

A revocable living trust addresses the core problems the article identifies. Assets held in trust for a minor child pass to the trustee at death, not to the child directly. The trustee manages distributions for education, healthcare, and living expenses according to the terms the parent set. The trust can stagger distributions across multiple ages or milestones, rather than delivering everything at once. Maryland has adopted the Uniform Trust Code, which provides a well-developed statutory framework for trust administration and beneficiary rights. Trusts created under Maryland law also carry creditor protections through spendthrift provisions, which prevent a beneficiary's creditors from reaching trust assets before distribution. For parents who want to protect their children from outside financial risks as well as from their own inexperience with money, a trust with a spendthrift clause provides a layer of protection that an outright inheritance cannot. Families evaluating whether a trust fits their situation can review what a revocable trust is and how it works before deciding on a structure. Understanding the distinction between estate tax and inheritance tax also matters for Maryland families, since the state imposes both.

Context from SimplyTrust

The problems the article describes are not unique to high-net-worth families. Any parent with a life insurance policy, a retirement account, or a bank account faces the same beneficiary designation issue. The dollar amount does not change the legal reality: a minor child cannot receive assets directly, and without a trust or proper custodial arrangement, a court fills the gap. SimplyTrust allows parents to name minor children as trust beneficiaries and set age-based or milestone-triggered distributions, keeping assets under trustee oversight until the child reaches an age the parent chooses. The platform also walks parents through estate planning considerations for new and growing families, including guardian nominations and provisions for minors. For parents who want to understand how beneficiary designations interact with the broader estate plan, the role of beneficiaries in estate planning provides useful context on how different designation types work together.

Source: The Hidden Problems with Naming Minor Children as Beneficiaries