State RegulationsOH specificDifficulty 1/5
What is the effect of naming a trust as the beneficiary of a life insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A trust designation routes the death benefit to the trustee, who holds and distributes the proceeds according to the trust instrument the policyowner created. Ohio recognizes trust designations within its beneficiary framework (ORC 3911.09 and companion sections), and the arrangement gives the owner control over how and when beneficiaries receive the money while keeping the proceeds outside probate.
Why the other options are wrong
- B) Next-of-kin payment applies when no valid beneficiary is designated; a named trust controls instead.
- C) The drafting attorney has no claim to the proceeds; the trustee named in the trust instrument receives them.
- D) Distribution follows the trust's terms, not an automatic equal split among relatives.
Memory hook
Trust beneficiary: the trustee cashes the check, the trust rules spend it.