Having and raising children is one of life’s biggest joys and challenges. Parents have myriad responsibilities, from the everyday to major life decisions, such as education and medical care.
Given the demands of parenthood, parents often put off thinking about the possibility that something could happen to them that would prevent them from caring for and raising their children. While it is difficult to think about, by not planning for that possibility, parents burden others with some of the most important decisions that can be made about their children’s future.
If you and your spouse or partner (or you, as a single parent) die or become incapacitated prior to enacting a plan for your children, the courts will decide who will raise your children and who will be responsible for their finances.
There could be several competing family members or friends who think they are the best for the role of guardian, which is an expensive as well as emotional fight, not only for your family members, but also for your children. Even if there is consensus amongst the potential guardians, the potential guardian will have to go to court to petition to become a guardian for the minor children.
The guardian will have to pay attorneys’ fees and court costs, which will be reimbursed to them by the assets left to your minor children. They will also have to submit an accounting to the court every two years until the minor children are 18. The guardian and their attorney are entitled to payment for their services, which is taken out of the children’s assets. All of these costs add up to at least ten thousand dollars, but can be significantly higher. Additionally, once the minor child turns 18, all of the assets remaining in the guardianship must be distributed to them. Even the most mature 18-year-old is unlikely to manage their inheritance wisely.
With some thought and discussion amongst the parents and the individual(s) they’ve chosen to become the guardian, parents can have a voice in raising their children if they can no longer care for their children. Furthermore, they can delay distribution of inheritance to their children past their 18th birthday when your children are more mature and established. During the delayed distribution, the inheritance can still be used for the children’s benefit, such as paying for school or medical expenses.
My firm prepares living trusts for young families that include guardianship and distribution provisions that ensure that parents have a say in who will raise their children and who will manage their children’s assets. They have the option of stating specific ages for when their children can access their inheritance and how assets are invested and used for the child’s benefit until they reach those ages.
With clear and detailed planning documents, parents can take comfort knowing they’ve done everything for their children now and into the future to ensure their children’s care and wellbeing regardless of what happens to them.
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