An essential aspect of estate planning is providing for your family members after you are gone. This is especially important if you have minor children. Until your children have reached adulthood they will need someone to care for them and financially provide for their needs.
Name a Guardian
You must choose a guardian for your children in case they are still minors when you and your spouse pass away. If you do not name a guardian, the choice will be left up to a judge. In this case, your children may become wards of the state if no available guardian can be found, or they may become ensued in a heated custody battle if several family members wish to be the caregiver.
As you consider possible guardians look at specific attributes such as age, availability, and lifestyle. Your guardian must be someone who is of a mature age without having health problems that would hinder caregiver duties. If a possible guardian has a busy career or a large family, he or she may not be able to provide the love and time your children need. You may also want to consider your guardian’s marriage status, morals and values, and religious views. As you take all of these factors into account, create a final list of two to three possible guardian choices. It is best to have one or two back-up guardians in case your first choice should become unavailable.
If your children are minors when you pass away, they will not be able to directly accept and use the inheritance you wish to leave. If you do not make other arrangements, the chosen guardian may have control of your children’s property and money.
It may be best, however, to create a special trust to manage your children’s inheritances. You can name a different trustee than your chosen guardian if you feel the guardian may not be good with money, or if you would simply like to split the duties between family members.
The trustee can distribute funds on behalf of the minors or to the guardian as needed until your children reach adulthood. Further, you may choose to have the trustee continue to disperse funds over a number of years even once your children are grown. This is an option often chosen when a parent feels early receipt of an inheritance may lead to mismanagement.