Planning for Children

As a parent you naturally care for your child(ren)’s basic needs: feeding,  bathing, providing shelter and clothing, and comforting through scraped knees and bad days. What may not come as naturally or as easily, but is just as important, is protecting your child(ren) in the event the unthinkable happens, and your children are left without either parent to care for them. Taking the time to create an estate plan is one of the most important things parents can do for their children.  Planning will ensure your children will be cared for and decisions will be made for them by people you choose and trust and the assets your children inherit will be used for their benefit and managed responsibly until they are able to handle their own finances.

Some parents permanently postpone writing a will because they cannot decide who to name as guardians of their children. In their indecision, they leave the court with no guidance and their children with the possibility of inappropriate guardians. It is far better to name a first and second choice for guardians now and to change the designation later if better choices evolve, than to postpone this decision completely.

For parents of young children, the primary objectives of estate planning are to:

• Plan for care of their children
• Ensure that their property will be transferred to desired individuals
• Determine who should handle the business affairs of the estate
• Determine who will handle the children's property until they are older

Perhaps the most important benefit of the Will is that it allows the parents to determine who will provide for the social training and physical needs of children if neither parent survives. If there is no Will nominating a guardian, the court must appoint one even though it cannot possibly know the values, lifestyle and child-rearing philosophy of the parent(s). It must make a decision based on state law and in the best interests of the children. It is often difficult to determine the children's best interests in a brief court hearing

When nominating a guardian, give careful consideration to lifestyle and values. Consider the physical ability of the possible guardian to raise the children. A small child may be too much for a grandparent. The person being nominated might divorce and remarry or move to another part of the country. Under what conditions would this person be acceptable as guardian? All parents should indicate an alternate choice in case the first choice nominee is unable to accept the responsibility of serving as guardian. Most importantly parents should discuss their plans with the person being nominated.

In addition, parents need to develop financial plans for the care of their children. They should review the status of their assets and their life insurance program. How much money will be available? Is this adequate or is additional coverage needed until the children are grown? Someone must handle the money that will be left to the children. This should be a person who will spend money as you would under the same circumstances. Parents know best who this is.

A trust is another legal arrangement you may use in transferring property to a minor child, either while you are alive or at your death. A trust gives you considerable control and flexibility. You name the trustee and set out the trustee's powers, duties, and responsibilities. You decide when and how amounts will be given to the beneficiaries. You decide how long the trust will last. You also decide who will get the trust property when the trust terminates. Many parents would prefer for their assets to be held in trust for their children. Often parents prefer to have a combined pool of assets for the children, instead of separate equal shares, until the time of final distribution. This can account for different needs of the children.

If you have not yet created a plan that adequately provides for your children, we encourage you to contact our knowledgeable estate planning attorneys today.