When most folks think of estate planning it is usually in the context of their parents or grandparents. That said, it is probably more essential for parents with minor children to have a legal plan in place.
There are several steps parents with minors can take to ensure their children are legally protected in the event of a parent’s incapacity or death. The first and most basic is a will. A will is set of instructions to a probate court judge. It does not skip court it, in fact a will is written to be read in court. In the case of younger families, a will directs the judge on who is serve as guardian for minor children if the parents are deceased.
For some families, a will is all that gets done; however, I recommend going a step further and at least considering a living trust. In a trust, an individual puts all of their assets into the care of a trustee who follows the directions left in the trust to pay for expenses. I like this scenario because it allows parents to plan how their money will be spent on their children if they pass prematurely.
For example, I may direct that my money be spent on my son’s education, health and maintenance instead of a new truck. A trust allows me to decide instead of a court. I may also direct that my son must reach an age older than 18 before he can receive direct access to his money.
Another key advantage of using a trust to help plan for younger children is that it ensures that the person managing the money for the kids will be a different individual from the one serving as guardian. The court is supposed to police guardians to make sure that money is not wasted but they do not always have the resources to check in as they should. This scenario means multiple eyes are watching the estate making harder for anyone to justify using your money for anything other than the care of your children.