For most parents, the main goal of estate planning is to ensure that their children are looked after in case anything were to happen to them. While we'd all like to believe that we'll be able to leave our estate to our adult children after a long and fruitful life, sometimes life can throw a wrench in our plans. We understand it’s never pleasant to think about leaving your minor children behind due to an untimely passing, but assuming that the worst may happen is essential for creating an estate plan if you have minor children.
Every family situation and estate plan are unique, and when you create yours we implore you to consider these seven elements to ensure your minor children are looked and cared after.
Selecting a guardian for your children can be one of, if not the most emotional decisions in your estate planning process. Should you and your spouse be unable to care for your children, a legal guardian will take on this responsibility. They will be able to make all the children’s legal, medical, education, and financial decisions until they come of age. They also assume the responsibility of providing basic care such as shelter, food, education, and healthcare for your children.
2. Power of Attorney
Power of attorney refers to giving another person the ability to make medical and financial decisions on your behalf. Usually, you may require a power of attorney if you become ill or incapacitated, and the responsibility may be permanent or temporary.
While you can grant your adult child power of attorney, you may not give this task to a minor child.
3. Family Safeguard Plan
Most parents want to do what is best for their children, which entails considering their children’s current and future circumstances. You must also factor in the children’s age, special needs, health concerns, and quality of education. Some children, for example, may be able to tolerate moving to another state, while others may benefit from staying in their current school.
It is wise to draw up a Children’s Safeguard Plan that contains short- and long-term care instructions, including the dreams and values you want for your children from their guardian.
4. Asset Inventory
Avoiding a lengthy probate process is the goal of any estate planning lawyer, and asset inventory plays a significant part in the process. You’ll want to note how your assets will be divided between beneficiaries. This will keep things organized and amicable when the time comes to divide your assets.
The executor is the person who makes the decisions relating to your estate, including settling debts and disbursing inheritances and assets. While you may nominate your chosen guardian as an executor, you may also consider a trusted estate planning attorney who has the legal expertise to conduct the process smoothly.
6. Inheritance Ages
Minors are unable to inherit until they turn 18-years-old. While this is the default age, it’s suggested to delay the inheritance age, especially in the event of a large estate. Common strategies involve staggering the inheritance or delaying it until 21, 25, or even 30-years-old when you can rest assured that your child will be financially responsible and fiscally stable.
7. Trust vs. Will
A will is a document containing your wishes regarding your estate and beneficiaries and is an essential document that any estate planning attorney can draft for you. It outlines all the factors discussed above, such as power of attorney, guardianship, and inheritance ages.
However, we recommend exploring a trust instead of a will. Why? Trusts offer more control than a will, and there are several trusts aimed at protecting minor children and their guardians, allowing them to use the trust for medical or education expenses. These trusts ensure that the guardian will have the finances necessary to carry out your wishes until your minor children come of age.
Great Parents Plan for Their Children's Future
At Carolina Family Estate Planning, we are specially equipped to meet the unique planning needs of families with minor children to ensure that your children are fully protected. If you have a current estate plan, our dedicated team will be more than happy to review your current estate plan or draft a new one providing you with the peace of mind that your family will be protected in the event of a tragedy.
Get started today and check out our free Children's Safeguard Planning guide, which addresses the unique issues involved in estate planning with minor children, such as naming guardians and protecting their future. You can also reach out to one of our estate planning attorneys at 919-443-3035 or via our contact form to discuss the best way to get started.
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