What to do with the Children? How about a Trust?
One of the favored uses for a Revocable Living Trust is the proper distribution of assets to children. Any money left to a minor child needed be left in trust to avoid unwanted consequences.
In Arizona, if a minor is left more than $10,000 in a year, a Conservatorship has to be opened. Life insurance benefits and retirement benefits will not be paid to that minor unless a court-appointed Conservator is involved. This court process can only be avoided with a Trust.
Courts have a very different view on how to use funds for a minor than most people. Because of the statutes, the Courts will release all the assets to the child upon the age of eighteen.
The terms of a trust can guide also allows the Trustee to use the funds throughout the beneficiary's childhood. For a child who is having problems with substance abuse, blood testing can be required. For a child who is responsible and trying to start a new business, the Trustee can use trust funds to help with the new business.
Not so with Conservatorships, where the Courts may focus on saving the money for college or impose restrictions that you do not have. I have seen Courts deny tuition payments for private high schools in order to protect the funds for college. I have seen a Commissioner cite his own 1993 car in refusing to allow the Conservator to purchase a new car for a seventeen year old who was driving in a rural area a 1994 truck with 120,000 miles.
Some people list their sibling or another adult as a beneficiary for life insurance or retirement benefits. The hope is that that adult will take care of the children. However, there is no guarantee that will happen.
Even if one's children are grown and independent, there is no guarantee that any child will outlive you. Therefore, if funds are to be left to that child's children (your grandchildren) who are minors, then the Trust is necessary.