Most parents want to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles, and good friends sometimes want to leave gifts to beloved young children too. Unfortunately, these good intentions may have unintended results. A careful estate plan is essential to protect your children. Here’s how to avoid some very common estate planning mistakes when considering your children’s future.
Many parents think if they name a guardian for their minor children in their wills, their appointed guardian will automatically be able to use the inheritance to take care of the children. But that's not what happens. Probate courts must adhere to certain rules regarding a will:
Parents often, and wisely, prefer that their children inherit a bit later in life. But with a simple will you have no choice - once your child reaches the age of majority, the court must distribute the entire inheritance in one lump sum.
A court guardianship for a minor child is very similar to one for an incompetent adult. Things move
slowly and can become very expensive. Each and every cost incurred on your child’s behalf must be documented, audited, and approved by the court – including the attorney who will need to represent your child. All of these expenses will be paid from their inheritance. Additionally, because the court must try to treat everyone equally under the law, it is difficult to make exceptions for each child's unique needs.
A Trust offers many practical advantages over a simple will:
Many parents and grandparents opt for the flexibility and control of a Revocable Living Trust:
For many folks, the absolute best solution is to keep the assets in trust for their lifetime or until assets get spent down. Assets that are trust protected are there for your child but can’t be taken from them. It’s hard to think about your children growing up without your guidance, but a revocable living trust can give your children needed financial protections should anything happen to you.
If you would like to learn more about creating an estate plan specific to you and your family call us for a free initial consultation at
email me at firstname.lastname@example.org
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