Estate Planning - Securing Your Children's Future
Far too many parents put off estate planning because they don’t think they have enough assets, or they think they are too young. Both are mistakes. It is imperative to leave children in a good place should in the unlikely event that the parents are not able to care them, and it is also important to nominate a guardian if the child/children is a minor.
If you don’t appoint a guardian for your children, in the event of your passing, the court will choose one for you. The court appointed guardian may not be someone you’d want to raise and care for your children. It is very difficult for the courts to determine who is best suited to care for your children in the span of a few brief hearings.
Deciding on a guardian is a very difficult decision, but we have experience in walking people through this process. Before coming in, some things you may want to consider are:
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Age: Will they be old enough to properly raise your children and young enough to continue to provide care for your children as your children age.
Commitment: Is the guardian going to be willing to take on this responsibility?
Temperaments: It’s important to pick a guardian with a personality that blends well with your children.
Religious beliefs: Does your guardian believe what you believe? In what belief system would they raise your children?
Nature of existing relationship with children: It is important that the guardian currently has a good relationship with your children.
Location: Where do you want your children to live?
Does the proposed guardian have other children? Will the guardian have enough time and resources to devote to his/her own children in addition to yours?
Finances: Can the guardian financially take care of your children?
Should the guardian you have selected in your estate plan become unable to raise your children upon your passing, you should have two alternates in your plan, as well. This will help ensure your children are not left at the mercy of the court system.
At a parent’s passing, the appointed guardians must be approved by the court. If a biological parent is still living, the court usually appoints them the guardian of the children unless evidence is presented that this individual is unfit to provide care.
TRUSTS FOR MINORS
A well-drafted estate plan gives you control over the distribution of your assets, allowing you to provide for specific people you designate and at the right time. We recommend all parents of minor children to create a trust that is designed to safeguard the inheritance for their children. A trust for a minor will outline how much money your children will receive, the age at which they will receive the inheritance and, to a degree, how they are to spend this money. This will designate funds as only for college and will keep your children from wasting their inheritance on frivolities.
In your estate plan, you must name a trustee to be in charge of handling the inheritance. The trustee may be different from the guardian selected in your estate plan. One reason you may do this is if the guardian is great with children but not with money.
In the trust, you can outline how the trustee is to budget funds for each child. One child may have special needs, or another child may need extra funds to develop a particular skill set. We can help you set this up so your trustee can effectively carry out the job you have given them.
Children are an integral part of the estate planning process. Your children’s well-being can be ensured with proper planning and a strong estate plan. If you have not yet created a plan that adequately provides for your children, we encourage you to contact our office today.