Protecting Your Children
For most of us, our children are our greatest asset. As such, we should do all we can to protect them. Parents do not want to think about leaving their children before they are adults, yet it is essential that this possibility is considered and an effective plan formulated. An estate plan sets forth your wishes for your children, which includes the nomination of a guardian, and two alternatives, in the event of your untimely passing while the child is still a minor.
If there is no plan in place, the court will appoint a guardian to raise your child based on what it finds to be in the best interest of your children. This court-appointed guardian may not be your first choice, or, in some cases, may not be on your list at all.
At estate plan can also safeguard your children’s inheritance, by giving you the ability to outline how much money your children will receive, the age at which they will receive the inheritance and to an extent how they are to spend this money. This allows you to designate funds for their college education or so they can buy a house. You can also choose to give your children their inheritance at a certain age, to help prevent them from wasting their inheritance. Such a plan can also protect them from potential creditors, lawsuits or divorce.
You can name a trustee in your estate plan who can make sure that your children’s money is handled properly. You can also outline how the trustee is to budget funds for each child. This may be particularly relevant when you have children who vary in ages or a child who has a special need.
An estate plan can also set aside funds to ensure that your children will be provided for even if your partner is not wise with money or remarries. For blended families, or families involving children from a prior marriage, an estate plan can designate that your assets will pass to your children, and not your stepchildren. Without an estate plan, your assets will pass to the spouse, who is under no legal obligation to pass the assets to your children.