The State’s Plan For Your Children’s Inheritance

Jackie Bedard
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If you don’t have an estate plan in place specifying what should happen to your children’s inheritance if you should die, do you know what the default plan is?  You see, every state has a set of default rules that are applied when a person dies without a valid will or legally documented estate plan.

In the absence of a legally documented plan, the courts would divide your assets among your children and each child’s share would be placed in a guardianship account.  The judge would then appoint a “guardian of the estate” for each of your children—this may or may not be the same person named as “guardian of the ward”, i.e., the person responsible for caring for your children.

The guardian of the estate would be responsible for managing your children’s accounts until each child reaches the age of 18.  What happens then?  When your child turns 18, they are considered, by law, to be a legal adult and full control of the accounts is turned over directly to the child.

Now, I don’t know about you, but I have yet to meet a parent who thinks 18 is an appropriate age to turn over full financial control to the children! Stop and think about it for a moment.  Total up the value of all your savings, real estate, retirement accounts, and life insurance policies, and ask yourself—Do I think my child would be ready to manage that much money as a lump sum at age 18?

To add insult to injury, the process of actually settling your estate can be time-consuming and costly, and then the person named as guardian of the estate must file ongoing accountings to the courts until your children turn 18—more time-consuming and tedious work for the guardian!

Most would consider this to be a plan that doesn’t work. The good news is that this doesn’t have to be your plan. By preparing ahead of time and legally documenting your wishes, you can put a plan in place that avoids unnecessary costs and delays, and includes clear instructions about who you want managing your children’s inheritance, and when you want your children to have direct access to the inheritance.

Free Guide for Parents with Minor Children:

If you have minor children, make sure you check out our free guide, on Children's Safeguard Planning, that covers the unique issues involved in estate planning when you have minor children, including naming guardians and protecting their future. Or, contact us to discuss the best way to get started at 919-443-3035 or via our contact form.