Minor children are the most important part of a young family, more important than the property or financial assets. Unfortunately, many young families fail to engage in estate planning to protect their children because they believe it is only about assets.
All parents with minor children, with or without significant assets, should have a child-centered estate plan. A child-centered estate plan is one that considers who will raise your children and how your estate will be held for their benefit. Without child-centered estate planning, you are giving up your right to have your children taken care of the way you approve of.
The central component to child-centered estate planning is the Nomination of Guardianship of Minor Children. The Nomination will spell out your child-rearing values and allow you to name a guardian that you believe will comply with those values. This person may or may not be the trustee that will control property to be held and used on their behalf.
If you fail to nominate a guardian, then the courts will appoint the guardian based on what the court believes to be in the best interest of the child. Unfortunately, the court-appointed guardian may not be your first choice and may even be your last choice. Where no clear-cut guardian exists, or where there is a dispute over guardianship, the court may turn your child over to Child Protective Services to be placed with a foster family. In the worst case scenario, the court may separate siblings from their last living family members.
In addition, failing to provide an estate plan for the assets passed to a child could have their own problems. The probate court and attorneys will be permitted to assess fees for probating the estate and management of the assets. The assets might be controlled by someone irresponsible or someone who might misuse the assets. If any assets are remaining once the child reaches 18, they receive all the assets as a lump-sum. Unscrupulous people may take advantage of your immature and financially inexperienced child to further squander their inheritance.
Planning for children is easily incorporated into estate plans of any size. It can alleviate much of the worry and stress involved with leaving a child prematurely.
Contact Yeager Law for any questions, comments, or concerns.