Creating an estate plan when you have minor children brings special considerations and concerns. Everyone wants to create a secure future for their children, but few often plan carefully for it. Here are some of the reasons an estate plan is so important with minor children:
- Guardians – the law and the courts will always find someone to take care of minor children, but that person may not be the person you would have wished to care for your child. Children take a lot of time, energy, and financial support. When a guardian is making physical and financial decisions for your child, make sure it’s the person who is the best fit for the job. Grandma’s love is great, but if she needs help paying her own bills, she is probably not the best financial steward for your child. Additionally, geographic location becomes more important as a child gets older. Young children can move with an aunt in another state more easily than a junior or senior in high school.
- Assets – minors, anyone under the age of 18, cannot own assets independently. Someone must manage their finances for them and decide how the funds are invested and used. Making decisions like how much money is appropriate to spend on school supplies for the year, to determining what is an appropriate car when a child starts driving, to college decisions, are all supported by the person who is making the financial decisions. Also, parents of minors should consider if a child should receive his or her inheritance in full at 18, or if that money should be held in trust for the child’s use until he or she is older. An account called a Uniform Transfers to Minor Act (UTMA) can hold assets for a minor until they attain the age of 25, provided the inherited funds are less than $10,000.00. Inheritances that are larger than$10,000.00 require the oversight and approval of a court on how the funds are held and invested.
- Incapacity – In the event you and your spouse are incapacitated, who will manage not only your finances on your behalf and make medical decisions on your behalf, but care for your children until you recover? Your children, even if they are teenagers, are too young for the burden of making medical decisions for you, but probably would like to be consulted and included in the process. Naming the right people to care for your family while you are unable is vitally important.
- Life Insurance – While a life insurance policy isn’t an estate planning document, we mention it because these policies are so important for families with minor children. The passing of a spouse may create difficult financial times because of the loss of income as well as the potential loss of the survivor’s income to allow time to grieve. We recommend that families with minor children consider the needs of the family in the event of the untimely death of one or both parents. This should include income replacement as well as funding savings for college, weddings, retirement of the survivor, etc.. Speaking with a financial planner will help you best determine the amount of life insurance you need and the kind of policy you need.
At Grissom Law, we work with clients who are new parents to those who are new grandparents to discuss what estate plan will best fit your family’s needs and what factors need to be considered to provide for your loved ones. Call us at 678.781.9230 to schedule an appointment to discuss your needs.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.