Summer has flown by and children across the country have returned to school! It’s a time when parents of younger children are rejoicing about the return to routine, while others, perhaps with children on the brink of college, find themselves distressed with the cost of education. As the cost of college education soars, it is not uncommon for high school grads to enlist the help of parents and grandparents to help cover the costs. How will you pay for it? More importantly, could they afford it if you were no longer here? If you are the parent of minor children, it’s a great time of year to check in and touch base on your plans for the kids in the event of your untimely passing.
Start with a Will. A will is one of the main components of an estate plan, and is recommended if you have money, assets, and property with a value in excess of $150,000 that you wish to leave to your loved ones, specifically children. Having a will reduce or eliminate any disputes about your wishes and should clearly articulate how you wish for assets to be distributed and when. Particularly with minor children, it is important to consider both of these questions. If you have more than one child, will they receive an equal distribution of assets? What age is appropriate to receive an inheritance? Will distributions be made with stipulations such as college attendance? These tough decisions can be carried out through the component of an estate plan called a trust.
Establish a Trust. A trust is established by the grantor for a beneficiary and managed by a trustee. The trustee is an individual or company responsible for managing the property in the trust until the appointed time when the beneficiary may come into their inheritance. This is often used for children or young adults who are not capable of handling the property until a later date. A trust can also protect your children from creditors, with the additional benefit of avoiding probate for assets transferred through a living trust. It’s the best way to ensure that your child’s financial future is stable, and in accordance with your wishes.
Guardian vs. Trustee? A Guardian has the responsibility to protect the physical and emotional interests of your children. A Trustee has the responsibility of protecting the assets within the trust that you have created. You must consider designating the same or different individuals for each role to avoid any potential conflicts of interest. For instance, the person you find to be best suited as the guardian of your children may not be financially savvy enough to manage the money in an estate or trust. Most people chose a family member as guardian, but you have the authority to choose anyone. Take the time to think about who will willingly take on the roles and responsibility of raising your children in your absence.
Have questions about how to create an estate plan that protects the best interest of your children? At Mortensen & Reinheimer, PC, we are REAL PEOPLE with REAL SOLUTIONS. We understand that estate planning is personal and, at times, complicated, particularly when there are minor children involved. With 24 years of combined experience and a specialty in estate planning, we are capable and qualified to understand your unique situation and its dynamics. We guarantee the highest quality counsel and legal representation. Call us today for an appointment to discuss estate planning and your guardianship needs!