How to Prepare Your Estate Plan to Protect Your Minor Children
As a parent, planning and caring for the well-being of our children takes priority over most things in life. Without question, we want to be sure should anything happen to us, our minor children will be well looked after and that money or property we leave for them will be used wisely for their care. Many of these concerns also apply to grandparents or aunts and uncles who may want to leave some of their assets to help support grandchildren, nieces and nephews.
Two Key Issues
There are two broad issues concerning this type of estate planning. The first is guardianship.
Should something happen to you such that you are not able to care for your children, you will want to name a guardian. This is a person who stands in your place to make day-to-day decisions on behalf of your children. From the mundane (what’s for dinner) to the more significant life choices, guardians play a vital role in protecting your children and making sure they grow to be responsible adults. For most people, a guardian is named in a will. Spouses will often name each other as first choice.
Beyond that, the choice of guardian usually becomes much more difficult; even with plenty of good options, it’s an emotionally-charged decision and should not be taken lightly. Most young couples consider parents or siblings for the role of guardians, but in many cases, the question can cause tension. Should you pick your parents; should you pick your spouse’s parents? Will feelings be hurt? Possibly. Will you ever make the perfect choice? Maybe not.
These hurdles should not stop you from deciding. Keep in mind, as your children grow, their needs will change and your choice of guardian may change as well. Your parents will age, and you may find your siblings or very close friends start to look like a better option over time. The good news is most guardians never need to step into their role and changing your choice of guardian is very easy to do.
Failing to decide is a decision with significant consequences. It is a decision to leave the choice in the hands of the court system. In the absence of a named guardian, someone, usually a family member, will go to the courts to ask that a guardian be appointed. Sometimes this process is extremely smooth and timely. In a few cases, family members do not agree on the best choice and can create extensive uncertainty while lawyers and the courts work to achieve what they think is the best possible outcome.
To see how bad this can get, simply Google “Fight for guardianship of Michael Jackson’s children.”
All of the uncertainty and potential issues down the road can be avoided by naming a guardian and keeping that decision up to date.
Next month we will look at ideas for leaving money to minor children in ways designed to support growth and stability.