By Attorney Garrett T. Smith
I often hear my clients comment that it is time to do their estate planning because they feel they are approaching the end of life. Many indicate that they did not need to start thinking about estate planning until they were 60 to 65 years old. While I agree that estate planning is important as you approach the sunset of your life, there are many benefits of setting your plan up early. I enjoy working with clients who still have minor children at home, because I help them feel confident that their children will be cared for physically, financially, and emotionally, even if the unexpected occurs.
I have heard and participated in many situations where the state takes custody of children when their parents pass away. Usually, the parents pass away unexpectedly if the children are still minors. Even in cases where there are other willing family members, the state will take custody of the children until the extended family can petition the court for guardianship. If guardians have not been provided, it is also likely that a probate process will be required for the assets because no documents have been put in place. Losing a parent is emotionally challenging enough without having to wait for the courts to order the children back with extended family members.
Unfortunately, these type of situations occur more often than you would think. As a parent of minor children, I can relate that my biggest concern when I set up my estate plan was ensuring that I named guardians for my children.
Another important aspect of estate planning for families with minor children is providing financial assistance for your children should you pass away unexpectedly. You can set up a trust that can hold your assets. The trustee can use the trust assets for the benefit of your children until they reach the point of being able to take care of themselves. any guardians are happy to step in and take care of children if the situation demands it; however, taking on the financial obligations can cause greater stress.
You can relieve the financial stress for guardians by funding your trust with your assets. For young families that may not have accumulated a lot of assets, you may consider getting an inexpensive term life insurance policy. You can name the trust as the beneficiary. The trustee will be able to collect the death benefit and then make distributions to your named guardians so they can care for your children according to general or specific wishes that you outline in your trust.
If you or a loved one has minor children and would like to discuss how to create a plan to provide for them in case of the unexpected, please give me a call!