Planning For Minor Children
Appointing a Guardian for Your Children
Nobody likes to think about what is truly a tragic situation: passing away while your children are still young. My mother died of cancer at the age of 42, when I was just 14. Fortunately, my father was still alive to take care of my sister and me, but what if he wasn’t?
Do you know what would happen to your children if both you and your child’s other parent died? What is the best way to prevent the Department of Children and Family Services from getting involved? At this point, I’m not even talking about who will manage your children’s money and property, which I discuss elsewhere.
You need to think about even the more basic questions:
- Who will have primary responsibility for your children?
- Where will they live?
- Will the proposed Guardian be able to take care of them? Will they want to?
- How will my wishes with regards to my children be carried out?
If you have not properly appointed a Guardian for your children, then the Department of Children and Family Services may take your children into foster care, and place them with strangers. Or, the “wrong” relatives may take your children. We’re sure that you have friends and relatives who you would want your children to go to, and then there are those relatives that you would never want to have custody of your children.
By properly appointing a Guardian – you can be sure that on that first terrible day, there will be someone there to take your children into their homes and to love and care for them.
You Need to Plan for your Children’s Future by Properly Nominating and Appointing a Guardian of Their Person and Property.
Leaving Property to Your Children in Trust
Picture the following situation:
You died while your children are still young, leaving them a sizable inheritance. This could be in cash, stock, your house, life insurance, IRAs, etc. Your child turns 18 and demands access to every penny of it. He goes out and buys a Ferrari, gambles it away, or invests it foolishly. Everything you worked and saved for and everything you planned for your child, is gone. It’s a horrible idea to leave property to your children outright, or to not plan at all.
The better solution is to leave the property in a trust. With a trust, you can appoint an independent trustee to manage the trust property, invest it, and to use it wisely. For example, the trust could provide that the trustee can only pay for your child’s health, education, maintenance and support, or college tuition. The trust could then provide that your child will have the ability to withdraw funds when they are older and wiser, say 1/2 at 30, and 1/2 at 35.
The biggest mistake is to not plan at all.
The second biggest mistake is to leave property to your children and not use a trust.
It is important to leave property to your children in a trust, instead of outright, to protect them from creditors and from themselves.