An estate plan may seem like something you only need to worry about near the end of your life, but this isn’t the case. Estate planning is not only for individuals with significant inheritance. They also provide for your medical and financial care if you are incapacitated and ensure your wishes are carried out. A comprehensive estate plan ensures that any minor children you have are protected in the tragic event of your death. You want to ensure they are cared for and are able to benefit from your assets.
Essential Choices to Make Regarding Children in an Estate Plan
An estate plan has several important uses. The main choices that impact minor children are determining a legal guardian and determining who has control over your children’s inheritance.
- Legal Guardian
A tragedy can happen at any time, and your estate plan can appoint a guardian if your children become orphaned. After the loss of one or more parents, the effect on children can be immense. This can be made even worse if family members argue over who is suited to care for your children or if the court places your children in the care of someone you wouldn’t choose for them.
The court’s goal is to make a decision in the interests of your children, but it may make the wrong call. In other cases, with no clear available guardians, children could enter the foster system. The last thing children need during this difficult time is to not be cared for or to feel like their living circumstances are unstable.
An estate plan allows you to choose a legal guardian. That way, you can select someone your children feel comfortable with and someone you believe has the ability and responsibility to care for them. You may want to choose an alternate guardian in the event that the first party you named cannot be a guardian. Choosing a legal guardian for your children is not a decision to be taken lightly. A guardian must be over the age of 18 and must be able to care for your children’s basic needs and provide support. They must be capable and willing to do this.
- Distributing Inheritance
Another important decision is how your children’s inheritance will be distributed to them. It’s not always in your children’s interests for their legal guardian to also have control over their inheritance until they reach a certain age. You want your children to have access to important assets in your inheritance without being completely responsible for the inheritance from a young age.
Estate planning can allow you to place assets in the care of another responsible family member or professional through a trust or other method until your child reaches a certain age. This other party will have a fiduciary duty to care for the assets in an inheritance in a way that is in your children’s interests.
Important Aspects of an Estate Plan
The aspects of an estate plan that directly impact minor children are:
- A Will: In a will, you can name a legal guardian and alternate guardian for your minor children. This may be a family member, close friend, or other responsible party you trust. A will also allows you to select an executor and a plan for distributing your assets.
- A Trust: You can place assets in a trust and assign a trustee to look after them until your children have reached a certain age and can be responsible for them. It also allows these assets to avoid probate court.
- Beneficiary Designations: Designations on individual accounts should likely be made to the trustee rather than minor children. Otherwise, a conservator will be responsible for the accounts until the children are adults.
Additional aspects of an estate plan could include:
- Financial Power of Attorney
- Medical Power of Attorney
- Medical Directives
An estate planning attorney can help you determine what aspects of an estate plan are important to protect your children and carry out your wishes.
Q: What Is an Important Component of an Estate Plan That All People With Minor Children Need to Complete?
A: A will is an essential part of an estate plan when you have minor children. In this document, you can appoint a guardian for your children in the event that you and your co-parent are unable to care for them. You can also explain your wishes for your estate and property distribution. A will only handles your wishes in probate court.
Q: What Is Important to Consider When Creating an Estate Plan?
A: The creation of any comprehensive estate plan should consider:
- Your beneficiaries’ needs. Your beneficiaries may include your children, other family members, or even organizations. These beneficiaries each have different financial requirements and needs.
- Your finances. You want to have a full picture of your assets at your current point in life and how they may change throughout your future. That way, you will better understand how to distribute your assets and plan for your own expenses.
- Your life changes. There are several potential changes in life that can change the parameters of your estate plan or require specific planning.
Q: What Are the Three Primary Goals of Estate Planning?
A: The main goals of a comprehensive estate plan include:
- Providing directions and legal authority to responsible parties to handle your care at the end of your life or if you become incapacitated;
- Protecting your assets during your life and after your death;
- Providing your loved ones with the benefits from your estate; and
- Limiting the expenses and time your family and loved ones must spend.
Q: How Much Does an Estate Have to Be Worth to Go to Probate in Missouri?
A: Small estates valued at $40,000 or less do not have to enter probate in Missouri. Instead, if it has been 30 days or less since the day of death, it goes through a simplified probate process. With a Small Estate Affidavit, the estate can skip the long and complicated probate process. Estates greater than $40,000 must go through probate unless there is an estate plan in place that avoids probate.
Benefiting Your Family
A comprehensive estate plan can provide you with a sense of certainty at any time in your life. An attorney can help you understand what components of an estate plan are useful to you and help you provide benefits for your children. Contact Stange Law Firm today for help with estate planning.