Estate planning is always important. But when you have children, estate planning is even more crucial. You need to consider planning for minor children and setting them up for a bright future- regardless of what happens to you.
Unfortunately, many couples with children don’t think their finances are significant enough to do any planning. But the size of your bank account doesn’t matter, and your will is about much more than money. Here at Wills and Wellness Estate Planning, we can advise you as you prepare your family for the worst-case scenario.
Why Do You Need Planning for Minor Children?
Although your estate planning allocates your assets, it also decides who will take care of the children. If one parent passes away, the other will care for the child. However, if both parents pass away, there is no obvious caretaker.
For that reason, you should declare a succession of guardianship in your will. Doing so makes the guardian of your children clear. It also can prevent legal battles over guardianship. You can be confident that your wishes will become reality.
While choosing a guardian, you should consider all of the following:
Their relationship with the child
How far they are from your children’s home
Their financial situation
The prospective guardian’s religious beliefs
Before you name the guardian in the will, you should speak with them. Guardianship is a major undertaking and can have a significant impact on the life of the guardian. Instead of surprising them with the decision, have a long conversation about it.
Another key detail is the asset transfer. If you don’t have a will, your child gets a share of the estate. The child has access to the money by asking the guardian for it. Then, the guardian must ask the court for approval. Once the child is the age of majority, they get access to all of the assets. This is regardless of their ability to handle the money responsibly.
In many ways, this is not ideal. You might prefer to do things your own way. This means doing estate planning and making a minor’s trust. You can appoint a trustee to handle their assets. Furthermore, you can choose an age at which the child has complete access to the trust. This could be any chosen age.
Another option for handling the assets is to distribute the funds in specific increments. For instance, you could stipulate that the child can demand ⅓ of the assets at the age of 23. At 28, they can demand another third. Then, they can demand the final third when they turn 35.
Your will also names an executor. This person is the one in charge of obtaining all of your assets and selling, liquidating, and distributing them. The executor also settles disputes among the various beneficiaries and claimants.
Do You Need an Estate Planner?
Regardless of the value of your assets, estate planning for your children matters. With no plan in place, you leave your children’s future in the hands of a stranger. With a plan, you can envision a future for them and secure that vision.
In 2018, 19.5% of the Denver County population was under 18. There are many families with minors, and we want to help those families with their estate planning needs. Contact Wills and Wellness Estate Planning for more information.