If you’re married, unless there are very unusual circumstances, your spouse should be the beneficiary, especially if you live in a community property state.
A community property state is where any asset acquired during the marriage is considered community property, which means each spouse equally owns it. Any income that either spouse makes during the marriage is community income.
However, some exceptions permit spouses to own assets separately from each other. Gifts, inheritances, and assets acquired before the marriage are considered separate property.
Only nine community property states, plus three states, allow residents to opt into community property law. The other 38 states plus Washington D.C. follow a common law property system where ownership of marital assets is different: whoever acquired the property owns it outright. However, a couple can choose to become joint owners, such as through a joint bank account.
If you’re now wondering which states are community property states, they are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
If you’re single, you might have a tougher time naming a life insurance beneficiary.
If you have minor children, ask a lawyer about naming a trust as the beneficiary.
If you have a disabled family member, consider a special needs trust.
If you don’t have a trust, you can name an adult family member or any other trusted person. However, remember that if you name an adult family member, those funds legally belong to that individual once the proceeds are paid. Therefore, you better trust that person and ensure they understand the funds need to be used for the intended minor child/children.
Finally, when deciding, do so as if the insurance company would pay out this account tomorrow.
You should always consult with an estate planning attorney.
Reference: Cision (May 20, 2022) “How to Choose a Life Insurance Beneficiary”