I Have Minor Children; How Does That Affect My Estate Planning
As children under the age of 18 cannot legally own assets independently, parents with minor children must make certain changes to their estate planning.
There are now about 63.1 million parents with children under the ages of 18 across the US. If you have minor kids, it's important to start planning your estate. Otherwise, you might not have plans in place if anything ever happens to you.
Planning your estate now will ensure your children are well taken care of. After all, planning for your child's future is part of being a parent. Beginning the estate planning process can help you get your affairs in order.
Not sure where to start? Here's everything you need to know about estate planning with children.
After reading this guide, you can make informed choices with your family in mind. Read on to learn more about estate planning today.
The COVID-19 pandemic increased people's desire to get a will by 35%. Unfortunately, two out of three people still don't have essential estate planning documents in order. What's involved with the estate planning process, exactly?
Estate planning isn't as complex as people might believe. It's the process of determining factors of your life that someone else will handle when you're no longer able. You can ensure everything is handled according to your wishes.
Estate planning documents can cover who will handle your medical or financial decisions when you're unable. It can also outline your specifications in these circumstances.
These documents can also determine what will happen to your bank accounts, home, and belongings when you pass on.
Estate Planning With Children
Life changes when you become a parent. Your estate planning needs to change when you have minor kids, too.
Most parents don't pass on until their children are into adulthood. Unfortunately, you can't anticipate events that could change those circumstances. If you die and leave minor children behind, your estate documents can outline your wishes.
Minor children are under the age of 18 and therefore can't make decisions about legal documents. They also can't make decisions regarding property, including:
- Bank accounts
- Real estate
- Life Insurance
- Retirement Accounts
Creating a trust or will for your children will outline your wishes and requirements if anything happens to you.
It's important to hire an estate planning professional as you begin estate planning. They'll help you navigate the steps involved throughout the estate planning process.
Every family situation has its own unique set of circumstances. With that in mind, everyone's estate planning process is a little different. However, there are a few essential matters you might want to discuss with a lawyer or spouse.
Here are a few considerations to keep in mind while planning your estate if you have minor children.
What will your child's life look like if you're no longer able to take care of them? You might want to consider who will become their physical and legal guardian. For example, you might want to choose a:
- Older siblings
- Aunt or uncle
Determine who you trust to care for your child when you're no longer able.
Power of Attorney
In some cases, you can become unable to make your own medical and financial decisions. During these situations, someone with a power of attorney will step in. You can decide who will make these decisions for you.
In some cases, their power of attorney is only temporary. For example, you could fall into a coma after an accident. In that case a Living Will is also important.
A medical power of attorney gives an individual the ability to make any necessary medical decisions. Financial power of attorney gives them control over managing finances.
You can give one of your adult children power of attorney. However, you can't give this power to minor children.
Make note of the assets you intend to leave your beneficiaries.
Specifying how you want things handled when you are unable will ensure everything remains orderly and amicable. Otherwise, there could be problems when it's time to divide assets and settle debts.
An executor will make decisions related to your financial assets, personal property, and real property. You might choose the same person as both your executor and children's guardian.
Your executor will manage the assets of your estate. They're responsible for distributing assets to your beneficiaries.
Your children can't officially inherit assets from your estate until they're 18. In some cases, the age of inheritance is delayed or staggered, too. You can decide what ages they'll receive part or all of their inheritance.
Don't want to start planning your estate. Instead, contact an estate planning attorney right away.
You can start by creating your will. Within your will, you'll name your power of attorney. You can also appoint an executor or guardian for your minor kids.
You'll state your wishes regarding your assets within your will, too.
Talk to your estate planning attorney about any state-specific inheritance or tax laws. You might need to consider these laws when outlining your will. In these instances, you'll also need to use state-specific estate planning documents.
Remember, consulting an estate planning attorney can streamline the entire process.
Create your trust as well. If you don't want to give beneficiaries assets directly, you can place them in a trust.
You'll use different types of trusts for money, stocks, real estate, or other pieces of inheritance.
For minor children, you can create a family pot trust or children's trust. These trusts allow for education and medical expenses if your children require them.
You might also consider a spendthrift or irrevocable trust for your child to inherit once they turn 18.
Working with an estate planner will ensure you customize these documents based on your distinct needs.
Estate Planning With Minor Kids: Get Your Documents in Order Today
Don't wait until the last minute to begin estate planning. Instead, talk to a professional about estate planning with minor kids. Your estate planning attorney will ensure the proper documents are in order.
With their help, you can secure the future for your children.
Interested in getting started? We're here to help.
See our blog article in Google my Business as well.