Many parents delay estate planning because they think they do not yet have substantial assets to protect. However, failing to create a proper estate plan prevents parents from adequately protecting their children. And, children are often the greatest assets that parents have and should be an integral part of the estate planning process. Your children's well-being is only ensured with proper planning and an effective plan. Contact Christie Tournet & Associates today to create a plan that adequately provides for the needs of your unique family.
For example, your estate plan can appoint a guardian for your children upon your passing. If there is no plan in place, the court will appoint a guardian based on what it deems to be in the best interest of your children. Unfortunately, the court-appointed guardian may not be your first choice, and in some cases, the appointed guardian could actually be your last choice. For many parents, this scenario is reason enough to create an estate plan.
Nominating a guardian can be a very difficult decision and one that should not be made without serious consideration. The individual selected should provide stability for your children in the difficult transition and ultimately continue care in a fashion with which you are comfortable. You should consider the following traits for a potential guardian:
- Age: You will want to make sure they are old enough to provide proper care (at least 18 years of age in most states) but young enough to remain in good health until your children reach adulthood.
- Commitment: Ensure that the guardian does in fact want to take on this responsibility.
- Temperaments: Carefully consider what kind of person will mesh well with your children. If you have young or energetic children, you may want to make sure the guardian exhibits patience.
- Religious and moral beliefs: Do they share the same values as you and your spouse? Would they instill these in your children?
- Nature of existing relationship with children: You will want to make sure that this person has a good bond with your children and that there is a mutual comfort level.
- Location: If you prefer that your children not move out of their current home and/or school district, you will want to make sure that the appointed guardian resides close to you and intends to stay there until your child reaches the age of majority.
- Does the proposed guardian have other children? If so, does the guardian have enough time and adequate resources to devote to his/her own children in addition to yours?
- Finances: Can the candidate financially provide for your child if there are not enough funds available from your estate?
In the event that the guardian you have selected in your estate plan is unable to raise your children upon your passing, you should name an alternate who also meets the aforementioned criteria. All appointed guardians must ultimately be approved by the court.
Trusts for Minors
In general, if an individual dies without an estate plan, his or her assets are distributed according to a formula determined by the state. In most instances, these laws pass wealth to both the surviving spouse and children. A properly crafted estate plan gives you control over this distribution allowing you to provide for specific people you designate and at the right time.
We generally recommend that parents of minor children create a trust designed to safeguard their children's inheritance. Such a trust gives you the ability to outline how much money your children will receive, the age at which they will receive the inheritance, and to an extent, how they are to spend this money. The trust can also protect against potential creditors or even divorce.
Trusts are important in that they ensure you still retain control over your wealth after your death in effect giving you greater control of your children's futures. Trusts can also allow you to set aside funds for a surviving spouse ensuring that your children will be provided for, even if your partner remarries after your passing. Our firm can assist in creating a trust that meets your specific needs.