Retirement accounts and most other beneficiary designated accounts are traditionally left out of estate planning documents. A trust attorney will usually recommend that clients keep their IRAs and life insurance polices outside of a trust. However, there is a huge caveat to this advice, you MUST have the appropriate beneficiaries designated.
For parents with minor children, the issue of who to designate is usually incorrectly assumed. Most parents will name their spouse as the beneficiary and then name their children as contingent beneficiaries. If all of your children are adults this scenario works beautifully. However, if you name your minor children as beneficiaries you now have a huge potential problem. For example:
Case No. 1
Husband has a life insurance policy for $500,000 and names his spouse as the beneficiary and then names his two minor children as contingent beneficiaries. Husband and wife die simultaneously in an accident. Now, the two minor children are the beneficiaries of the $500,000 and will have access to this amount, plus interest, the minute they turn 18.
Case No. 2
Mother has three children from a prior marriage. She names her children as the beneficiary of her life insurance policy and does not name her spouse. She dies and her spouse does not receive any of the proceeds. His financial needs may be unmet leaving him struggling to care for the surviving family while her children will inherit the entire policy when they reach the age of majority.