Protecting Minor Children with Estate Planning

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Beth Schanou

A current estate plan is important to have in place for senior citizens.  This planning is just as vital for parents of minor children for two important reasons:  naming a guardian and arranging for the management of the children’s inheritance.

A guardian is the person who has legal responsibility for a minor child in lieu of the parents.  Guardians are appointed for minor children when the parents are deceased or if they are unable to care for them.  Verbal communication to family and friends of your desired guardian is not sufficient.  The appointment should be written in a legally binding document…the Last Will and Testament.  This is especially important if a friend is the choice for guardian because the court will favor family in the absence of a documented selection.  So long as the appointment is feasible, the court will generally follow the wishes stated in a Will.  Without a written appointment, the court will decide who will care for minor children.

In conjunction with naming a guardian, the estate plan should provide for management of the inheritance received by minor children.  Naming minor children individually on a beneficiary designation form or through a Will or Trust is a mistake because minors are legally incapable of filing a valid claim for a death benefit or managing their own property.

If a minor child inherits, court-supervised proceedings are necessary to supervise the management of the child’s inheritance.  The requirements of court supervision and formal accountings add expense and inconvenience and the costs reduce the total gift to the child.  Another drawback is once the minor reaches the age of majority (18 or 21 in most states) the child receives the entire inheritance.

The solution is creating a child’s trust within a Will or using a revocable living trust to name a trustee to manage the property and specify when the property should be distributed to the child.  This adds flexibility to accommodate each child’s needs and circumstances.  Additionally, while held in trust, the assets remain protected from irresponsible spending and creditors.

It is just as important to plan for what will happen with your finances when you are no longer around, as it is to plan for them when you are.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

The Too-Good-To-Be-True Dividend

Published by Brett Carson We’ve all heard the saying, “if it’s too good to be true, it probably is.” That’s how I feel about high yielding investments in this ultra-low rate environment. Just recently, my father asked me to look into a stock that was trading at nearly a 19% dividend yield t …

Applying for College Financial Aid

Published by Beth Schanou  Now that January has arrived, those with college aged students are faced with the task of completing the Free Application for Federal Student Aid (FAFSA). The FAFSA data gives a student access to financial aid and many states and colleges (public and private) use …

If It Walks Like a Duck and Talks Like a Duck, It Might Be a Bargain

Published by Rob Furlong A couple weeks ago, Heisman trophy winner Marcus Mariota led his team, the University of Oregon Ducks, to the National Championship game. During his three years as the team’s starting quarterback, he has accumulated impressive stats culminating in a senior year wher …

Qualified vs. Non-Qualified – I Don’t Get It?!

Published by Teresa Milner If you’ve ever engaged in a conversation about retirement and you heard the terminology of qualified vs. non-qualified but you had no clue what that meant – know you’re not alone! The following is a basic explanation of the difference:
1 2 3 89 90 91 92 93 94 95 96

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation

TweetsFollow Us