Yes, you can name minor children as your beneficiaries. In the event the children are still minors at the time of settlement, a court would decide who the appropriate custodian should be.
You can appoint an adult custodian ahead of time using the Minor Beneficiaries UTMA (Uniform Transfers To Minors Act) section (Part 3) of the Ameriprise Financial beneficiary forms. This section allows you to choose who you want to serve as custodian.