Proper Wills & Trusts Are Critical with Children.
If you’re a parent of young children, you are almost certainly concerned that if something happens to you, your children’s future security could be at risk. Part of the process of planning for your children is to name a guardian for them.
Naming a guardian is a good beginning, and it will give you peace of mind in terms of your children’s upbringing, and making sure they have food and shelter. But that is not the entire picture. If you don’t do the proper estate planning, your assets (money, real estate, etc) could be tied up for years after your death and your minor children could suffer the consequences.
Also, it’s not uncommon for grandparents and other relatives to want to leave some of their assets to young children. If they don’t go about it in the right way, their good intentions can produce poor outcomes.
Naming a guardian for your minor children is a good beginning. But your good first step must be followed by equally sound estate planning on your part. The person you name to be the guardian of your minor children doesn’t have access to your money unless you take the proper steps. If you only name your minor children as beneficiaries in your Will, they cannot access the assets until they reach legal age (18 or 21). The probate court, not the guardian you chose, will manage the kids’ inheritance while they are minors. I’m not a fan of the government interfering with anything we do, particularly when it comes to making decisions for my kids. When the children reach 18, they will receive a lump sum. Do you want your kids to have everything you left them while they are still in college?
If you use a Will as your only estate plan, the assets that you leave to your children will be under court supervision. An attorney will need to be appointed to supervise every expense, and the Court will need to approve all expenses on the children’s behalf. Really? Is this what you had in mind for your babies?
Since a court guardianship is a one-size-fits-all process, your child’s unique needs WILL be neglected. Your child may want to play soccer, go to space camp, be a ballet student, and it’s entirely up to the court whether or not these expenses are approved.
Your best bet is probably to create a revocable living trust to help your decisions, and to help your children. The Revocable Living Trust has become the estate planning tool of choice for many parents and grandparents (and estate planning attorneys. With a RLT, while you’re alive, you can be the trustee and maintain complete control over the assets in the trust. After you die, the person you selected (successor trustee) will manage the inheritance for your minor children or grandchildren. You pick the age(s) you want for those kids to reach before they get the money.
Even if you become incapacitated, the trust is not adversely affected. There is no court intervention and therefore, no additional delays and expenses in carrying out your wishes. You can provide for your children’s college expenses, keep them from frittering away their inheritance on their 18th or 21st birthday and even grant them the opportunity to attend a special school or activity.
You should call Ventura/Oxnard Estate Planning Attorney Eric Ridley now for your free consultation about your will and trust.