If you’ve just had a baby, you know how busy and overwhelming life can be. Amid all the excitement and the adjustments you’re making, it’s important to take some time to think about your estate plan, and how you’d like to provide for your child in the event that you pass away.
Especially at this time in your life, planning for this unfortunate circumstance is the last thing you’re likely to want to think about; however, this is an essential part of protecting and providing for your family.
Here’s a few things you’ll want to consider when planning your estate:
- Making sure your property goes where you want it to, when you want it to, and in the amount you want it to.
- Making sure that you name a guardian to raise your child in the unlikely event that both you and the child’s other parent pass away while the child is still a minor.
- Making sure that someone is in place to manage the children’s property and financial affairs until they’re old enough to do so themselves.
As part of a good estate plan, you’ll have a will or living trust that will allow you to name someone you know and trust to serve as guardian for your child. This person will be responsible for bringing up your child and making all the day-to-day care giving and educational decisions. This is important because, if you don’t appoint someone to take over this essential may, then someone will be selected by the probate court, and it may or may not be the person you would have selected.
The same is true for naming someone to take care of your child’s finances. In general, if only one parent passes away, then the other parent just continues to take care of bringing up the child, including handling any property or money on behalf of the child. However, if both parents pass away, a conservator will be named to handle money and property for the benefit of the child. You’ll want to name someone you trust instead of leaving it completely up to the legal system.
Minors don’t have the legal capacity to handle their own financial affairs, so, in order to avoid the need for a court-appointed conservator, you can establish a trust on behalf of your child. This allows you to name a trustee to oversee your child’s financial affairs, and it allows you to control when property is distributed to your child. Instead of handing over all of a child’s inheritance when they reach age 18 or 21, many parents choose to distribute funds in stages as their child matures into a young adult.
An estate planning attorney can help you put the documents in place that will ensure your child is cared for even if you’re no longer here.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.