This is for all the parents out there. If you have one, two, three or more children then it’s important to know how you can secure their future and incorporate them into your estate plan. There are different ways to go about this depending on the following:
- Your child or children are under the age of 18 and legally designated as a minor, or
- Your child or children are all above the age of 18 and no longer minors
Depending on whichever of the two groups you fall under, both solutions will still be important to you if you are a mix of both scenarios or you want to prepare for adjusting your estate plan for when they grow up.
With Children that are Minors
Being parents of minor children, it is important to set up a life insurance policy to protect them in case of unfortunate incidents. In one scenario that Kim discusses in her webinar videos for new families, one parent passes away and leaves assets behind for their child that is not of age, but there are set restrictions put in place. No matter how much money or assets are left behind and given, the court will not recognize a minor as a legitimate beneficiary to receive it until the age of 18. So what does this process look like?
Depending on the situation it can mean:
- Designating a guardian to oversee the child or children until they are 18 years old and can be official beneficiaries.
- If one adult family member is alive and well, they need to head to the probate court where the court will appoint a financial conservator on the child/children’s behalf.
Related: Setting up Short-term guardianship
The financial conservator will manage the money/assets from now until the child/children are 18.
There are better, more effective ways to go about this. Instead of writing it all down in a big block of text, we urge you to check out more of our videos to gain an in-depth understanding of the several paths you can take to effectively ensure your child or children are taken care of in the case of unprecedented situations.
With Children that are not Minors
Now that we’ve discussed what you can expect in the case of being a parent of minor children, what about in situations where the children are adults?
This is where things get tricky depending on how many children, or beneficiaries you have, it can be more challenging and even ugly. As estate planning lawyers we are no strangers to the friction inheritances and will disputes can bring to families. In cases where this could be possible, like having multiple beneficiaries for each part of the estate plan, things may not go as expected.
That’s why when creating your will/estate plan you should keep in mind:
- Anticipating friction – if you know the child’s or beneficiary’s personality or lifestyle choices may bring friction during the estate planning process, it is vital to address that head on and create a plan that will stop that from happening before it even begins.
- Communicate your wishes –This is where we believe creating a legacy plan is important. In this process, if you want your beneficiary/beneficiaries to follow your wishes and use the assets in a certain manner, then you can stipulate that in your estate plan.
- Be mindful when assigning roles – Who is the beneficiary for what? Do you have a trustee in charge of your estate plan/trust? It’s the structure of how your estate plan operates that you should be mindful and vigilant of. If something happens and you need to change around the roles, then stay on top of it and amend your documents.
There are so many ways to create your estate plan and designate beneficiaries, that it can be confusing. We could go on and on with the many different ways things can play out, so if you haven’t checked out our videos above then we urge you to do so. If you still have questions, then contact us and we’d be happy to help.