We associate March with St. Patrick’s Day and Irish traditions such as searching for four-leaf
clovers, which are thought to bring good luck. One thing that parents should never leave to luck
is providing for their minor children. Young parents work hard to create a wonderful life for their
children and pass on wealth to them in the future, but they also need to create a plan for their
children’s care if something happens to them. If you are a parent, it is difficult for you to think
about having your young children grow up without you, but you need to recognize that lack of
planning for this possibility could be disastrous for your children.
Choose someone you trust to provide day-to-day care for your children. If one parent dies
or becomes incapable of caring for your children, their other parent will likely continue to have
physical custody of the children and responsibility for their care. However, it is crucial for you to
name a guardian who will step into your shoes to provide day-to-day care for your children in
the event that something happens to both of you. If you do not name a person you trust, a court
will step in to appoint someone. Because the person the court chooses to be your children’s
guardian may not be the person you would have chosen, it is vitally important to designate this
person in advance in your will or in a separate document. Although the court will still have to
appoint the guardian, it will typically defer to your wishes.
There are two types of guardians you should consider nominating in your estate plan:
● Permanent guardian. A permanent guardian is appointed by the court to care for children
whose parents are both deceased or are otherwise no longer able to care for them. The
permanent guardian steps into the parents’ shoes to provide for the children’s educational,
religious, legal, medical, and day-to-day care until they reach the age of majority in your
state (often age eighteen or twenty-one). As mentioned, to avoid leaving your children’s fate
to a court with no input from you, you can name the person you want to care for your
children in your will or a separate document specifically addressing guardianship.
● Temporary guardian. You can choose a person you trust to act as a caregiver for your
children for a limited time period by choosing a temporary guardian in writing. That person
will care for your children if you are temporarily unavailable, for example, if you become very
ill and need to be hospitalized or are away for an extended trip. You can authorize the
guardian to make decisions and take actions that you, as their parent, would normally
handle, such as consenting to medical treatment or enrolling them in school. A temporary
guardianship is usually only effective for a period of six months to a year, depending on
state statute. If you would like to have it effective longer, you will need to sign a new form
when the original one expires.
Make plans for your children’s inheritance. If you fail to plan ahead, the court may have to
appoint a conservator (sometimes called a guardian of the estate) to manage your children’s
inheritance until they reach the age of majority. This is necessary because minors legally cannot
own money or property on their own.
To avoid the appointment of a conservator, sometimes a custodial account under the Uniform
Transfer to Minors Act or the Uniform Gifts to Minors Act is created through the probate process
to hold the money and property your minor children inherit from you. The court will choose the
custodian of the account who will manage the funds for the benefit of your children. However,
when your children are legally recognized as adults at the young age of eighteen or twenty-one,
the account will terminate. Your children will gain full access to their inheritance and can use it
in any way they choose, even if they lack the maturity to make wise financial decisions or are
addicted to drugs or alcohol. In addition, any present or future creditors could try to reach your
children’s inheritance to satisfy their claims.
Although a custodial account is less expensive and easier to set up, a trust is often preferred
over a custodial account because it is more flexible and can be designed to protect the funds
against your children’s future creditors and their own imprudent spending. You can name
someone you trust who is skilled at handling money to manage and distribute the funds for the
benefit of your children if you die before they reach adulthood. This could be the same person
who will act as the children’s guardian, but you can name another individual as the trustee if you
choose. You can determine the age at which or the circumstances under which you feel
comfortable having the remaining funds distributed to your children and provide those
instructions in your trust document.
Give Us a Call
Your children are too important for you to leave their futures to chance. Call us today to set up
an appointment to create an estate plan that will safeguard their future and give you the peace
of mind that comes with knowing you have done everything in your power to care for them.