No parent wants to think about leaving their minor children behind in the event of a tragedy; however, because terrible things do happen, it is better to be prepared. Estate planning ensures that your children will be taken care of in the event of your death. Estate planning also ensures that you are in control of the decisions regarding your child’s future. If you fail to plan, a stranger, who does not know anything about your children, will make the decision for you.
Naming a legal guardian is not sufficient to handle the financial aspect of an inheritance. Most parents believe that if they name a guardian for their children in their Will, this will be sufficient to provide for their children after their death. However, a guardian does not have access to your child’s inheritance.
A guardian has physical custody of your child and raises your child in the event of your death. However, the court will be in control of your child’s finances until he or she reaches the age of 18 years. At that time, your very young adult will receive the entire bulk of his or her inheritance. Most parents do not want their 18-year-old receiving such a large amount. There are steps you can take to provide for your child financially in the event of your death.
Estate Planning with Minor Children
Who will have physical care and custody of my child?
Who do I want to have control over my child’s finances?
At what age do I want my child to receive his or her inheritance?
What is the best way to provide for the financial needs of my child?
Deciding who will have physical care and custody of your child is a very personal decision that only you and your spouse can make. Often, the best guardian is a close relative who shares your moral, religious and social beliefs. Before making a final decision about who should raise your child in the event of your death, discuss the topic with the proposed guardians to ensure they are willing to accept this responsibility.
The next step is deciding how to leave assets to your minor children. If your child is under the age of 18 at the time of your death, he or she cannot legally hold title to property or receive an inheritance. If you do not plan carefully, the court will take control of your child’s inheritance until he or she reaches the age of 18 at which time the court will release all funds and property to your child.
Simple Wills are not adequate estate planning tools to provide for minor children. Using a simple Will can result in costly court proceedings, attorney’s fees and unnecessary delays if your child needs access to his or her inheritance for emergency reasons. There are much better estate planning tools that you can use to protect your child’s inheritance.
One option would be to create a trust within your Will that will provide detailed instructions of how your child’s inheritance should be managed. With a children’s trust, you can name a person to manage your child’s inheritance. This person may or may not be the same person you choose to be your child’s guardian. Furthermore, you can choose the age your child will receive his or her inheritance rather than allowing your child to receive the entire estate upon his or her 18th birthday. A children’s trust also allows you to specify how the funds should be used such as for the education and upkeep of your child until he or she reaches a certain age.
The one problem with establishing a children’s trust in your Will is that it only becomes effective upon your death. It does not provide for your child should you become incapacitated. A revocable living trust allows you to name a person to manage your child’s inheritance until he or she reaches a certain age and can become effective upon your incapacitation. Another benefit of a revocable living trust is that it protects your child’s inheritance from creditors, irresponsible spending, the courts, ex-spouses and other family members.
Seek Assistance from an Estate Planning Attorney
In order to ensure that your wishes will be followed upon your death or incapacitation, you should seek the advice of an experienced estate planning attorney. Because there are many estate planning tools to choose from, you want the guidance of an attorney who is well-versed in probate and estate planning matters.
For more information contact our office to schedule a consultation with the attorneys at Krause Donovan Estate Law Partners, LLC. Their experience and knowledge can help you have the peace of mind of knowing that you have a plan. Contact Attorney Daniel J. Krause or Nelson W. Donovan today.
Reach us through our website or call our office at (608) 268-5751 to schedule your confidential, no obligation initial consultation