Planning for Young Families with Children
Children are a family’s greatest treasure. Many precautions are taken to safeguard minor children, yet most parents leave their children completely unprotected from being orphaned upon the loss or disability of their parents. Many parents put off estate planning because they do not think they have substantial assets to protect. This outlook is common among young adults who think they have plenty of time to accumulate wealth and plan for it at a later date. However, in failing to create a proper estate plan, many parents cannot adequately protect their children. All parents, with or without a great deal of assets, should have an estate plan in place to set forth their wishes for their children which includes, among other things, nomination of a guardian in the event that they have an untimely passing while the child is still a minor.
If no estate planning is done, the legal guardian of your children will automatically be the surviving biological parent, absent proof of unfitness. Absent proper planning, that surviving parent will also likely manage the inheritances you leave behind for your children. This might be the ideal situation in a traditional family, but what about a single parent family? Many single parents would not choose that other parent to be the one managing their children’s inheritance.
When your children reach the age of majority under applicable state law (typically age 18), your children will receive whatever is left of their inheritance without guidance or restriction. Most parents would not want an 18 year old to suddenly have wealth fall into their lap without some guidance.
What if both you and the other parent are deceased? In that instance, without proper legal plans in place, the court will select the guardians for your minor children based on what it deems to be in the best interest of your children. Unfortunately, the court appointed guardian may not be your first choice and in some cases, he or she may actually be your last choice. From just a few brief hearings, it is often impossible for the courts to determine who is best suited to care for your children in your absence. The court will also see that the inheritance is distributed outright to your children at age of majority. In some cases, the children may be sent to Child Protective Services to remain with a foster family until the court decides on a suitable guardian to take on the responsibility. For many parents, this scenario is reason enough to create an estate plan to protect their children.
Nominating a guardian can be a very difficult decision and one that should not be made without serious consideration. The individual selected should provide stability for your children in the difficult transition and ultimately continue care in a fashion with which you are comfortable. Every family situation is different, but here are some general guidelines for your consideration when selecting guardians for your minor children:
- Age: You will want to make sure they are old enough to provide proper care (at least 18 years of age in most states) but young enough to remain in good health until your children reach adulthood.
- Commitment: Ensure that the guardian does in fact want to take on this responsibility.
- Religious and moral beliefs: Select guardians who share your faith, core values, and life priorities, and will instill these in your children.
- Temperaments: Carefully consider what kind of person will mesh well with your children. If you have young or energetic children, you may want to make sure the guardian exhibits patience.
- Nature of existing relationship with children: You will want to make sure that this person has a good bond with your children and that there is a mutual comfort level.
- Location: If you prefer that your children not move out of their current home and/or school district, you will want to make sure that the appointed guardian resides close to you and intends to stay there until your child reaches the age of majority.
- Does proposed guardian have other children? If so, does the guardian have enough time and resources to devote to his/her own children in addition to yours?
- Finances: Can the candidate financially provide for your child if there are not enough funds available from your estate?
- Marital Status: If you select a married family member, you might want to appoint the family member only, not their spouse, in case they divorce or your family member predeceases