Many parents with young children overlook the need for estate planning – some because they are healthy and are not ready to think about death; others because they are afraid of the costs; but most because they feel like their modest assets don't yet warrant investing in an estate plan.
For parents of minor children, an estate plan ensures that your children will always be in good hands, financially, emotionally and physically.
If you don't have an estate plan, most states have one for you, and it may not be what you would want. Not many people would purposely let their state legislature draft their estate plan for them, yet that is what you get if you don't plan yourself.
A good estate plan for parents with young children should include a Will in which you name a Guardian to care for minor children and naming a Trustee. A Trustee is someone to manage the assets for the children until they become adults. The Guardian and the Trustee can be the same person or you can have different individuals. Your Will is the only means in which you can name a Guardian to care for your minor children after your death.
Naming a Guardian for Minor Children
If something happens to one parent, the other parent typically will continue to raise the children. If the parents are divorced or were never married, the children will ordinarily go to live with the other parent. But what if something happens to both of you? What if you are a single parent and the other parent is no longer in the picture? If there is not a parent who can care for the child, a Guardian must be appointed by the Court. If you have not named a Guardian for your minor children, the Court will have to appoint someone without knowing your wishes, your children or your family members. The Guardian is entrusted with all of the power and responsibility of a parent and makes important decisions about the child's upbringing, education, religion choices and medical treatment, so it is wise to nominate someone who knows your children and who will accept this role if called upon to do so.
Naming Someone to Manage Your Children's Inheritance
If your estate plan includes a Trust, you will be able to designate the individual who will act as Trustee, and will be responsible for managing your assets on behalf of your children. This individual (or individuals) can use the assets which you have left to your children to pay for the children's heath, education, maintenance and support, but you can restrict at what age the child inherits his or her money and assets. You can even include provisions to allow your child to inherit early as an incentive if they graduate from college or are working full time.
If your estate plan does not include a Trust, the Court will appoint someone to oversee your child's inheritance. A child will receive their inheritance when they reach the age of nineteen (19) if nothing is put into place to indicate the age at which the funds will be turned over to them. Most nineteen-year-olds cannot manage large sums of money. You should think about each beneficiary's lifestyle, personality, age and future. Will there be enough money for your child to finish college if the money is not managed by a Trustee?
Estate planning is one of those things that is easily put off, always saying there will be time. Unfortunately, we don't know just how much time there will be. If you value your property and the livelihood of your loved ones, don't delay any more. You'll feel much more at peace knowing that, should anything happen, your affairs are in order and your family will be taken care of.
Let us help you determine the best option for your specific situation. If you have questions about any of the above, or you're simply looking to discuss your estate planning options, we would be happy to meet with you for a complimentary estate planning session. Call our office today at (256) 519-9970 to schedule a time for us to sit down and talk.