Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem…

Svetlana's primary goal is to ensure her children are financially cared for. Since Ingrid (13) is a minor and Georgi (17) is also a minor in most provinces, they cannot legally receive life insurance proceeds directly. A trustee must be appointed to manage the funds on their behalf until they reach the age of majority. Given the descriptions, Sergei is "dependable and helpful," making him a suitable and responsible choice for a trustee. Conversely, Vladimir's "serious gambling problem" makes him an extremely high-risk and inappropriate choice to manage funds intended for the children's welfare. Therefore, naming the children as beneficiaries with Sergei as the trustee is the most prudent course of action.

A. Georgi and Ingrid but name Vladimir as a trustee. Vladimir's gambling problem and unreliability make him an unsuitable trustee, posing a significant risk to the children's financial security.
C. Sergei Naming Sergei as the direct beneficiary gives him legal ownership of the funds, with no legal requirement to use them for the children's benefit.
D. Vladimir Naming Vladimir as the direct beneficiary is highly irresponsible; his gambling addiction would likely result in the misuse of funds meant for the children.

1. IFSE Institute, Life Insurance (LLQP) Course, Module 6: Beneficiary Designations, Section 3.2 "Naming a Minor as a Beneficiary". This section explicitly states that if a minor is named as a beneficiary, the insurance proceeds must be paid to a trustee to be held in trust for the minor until they reach the age of majority. It emphasizes the importance of appointing a trustworthy individual to this role.

2. Canadian Life and Health Insurance Association (CLHIA), A Guide to Life Insurance, 2022, p. 11, "Choosing a Beneficiary". The guide advises policyholders to consider the implications of naming a minor. It explains that without a designated trustee in the policy or will, the proceeds may have to be paid into court, which can be a costly and lengthy process. This supports the need to proactively name a suitable trustee like Sergei.

3. Purdy, G. (2021). Canadian Estate Planning: A Practical Guide for Professionals. Seneca College Press. Chapter 5: Life Insurance in Estate Planning, pp. 87-89. This academic text details the fiduciary duties of a trustee and the legal mechanisms for holding life insurance proceeds in trust for minor beneficiaries. It highlights the necessity of selecting a trustee who is financially responsible and has the beneficiaries' best interests at heart, criteria that Sergei meets and Vladimir fails.