Estate planning is important for everyone, especially parents with young children. As a parent, you undoubtedly want to protect your children and provide for them. A well thought out and constructed estate plan ensures that you can continue to do both if something happens to you. With that in mind, the Long Island estate planning attorneys at Eghrari Wealth Training Firm discuss estate planning for parents with young children.
How Is Estate Planning Different When You Have Minor Children?
While you are present and capable of doing so, you can protect and provide for your children yourself. What happens, however, if you are not here one day or are no longer capable of caring for and/or providing financially for your children? Fortunately, estate planning tools and strategies can help answer that question.
Your minor children cannot legally inherit from your estate in the event of your death. Consequently, assets gifted to a minor in a Will must be managed by an adult until the child reaches the age of majority. The problem, however, is that you lose the ability to decide who that adult is if you rely entirely on your Will to pass down assets to your minor children. A carefully drafted estate plan offers you the opportunity to decide for yourself who that person will be and to create guidelines and rules to be followed regarding how that inheritance can be spent. Furthermore, if your children are minors, they will need a legal guardian if the worst were to occur and neither parent is able to care for them. Again, your estate plan offers the only formal method of telling a judge who you want to act as your child’s guardian. You can do this in your Last Will and Testament. While that appointment is not legally binding, a judge faced with appointing a guardian will know who you wanted that guardian to be.
Estate Planning Tools for Parents with Young Children
Fortunately, many of the most basic estate planning tools and strategies can be used to provide you with the peace of mind that every parent wants and needs. Starting with your Last Will and Testament, you can ensure that specific assets are passed down to the beneficiaries of your choosing. More importantly for parents with young children, you will also be able to appoint your Executor and nominate someone to be your children’s guardian if one is ever needed. While a Will is usually an integral part of an estate plan, it is often not the best tool to guard an inheritance meant for young children. For that, you may need to create a trust.
While your children are minors, a trust can be established to protect and manage the inheritance you leave behind for your children. A trust is a relationship that allows property to be held by one party for the benefit of another, in this case, for your children. Naming the trust as the beneficiary of a life insurance policy is another common estate planning strategy that allows you to provide financially for your children in the event of your death. As the Settlor (creator) of the trust, you appoint the Trustee. The Trustee manages trust assets and administers the trust terms according to your wishes. That same trust can be used to stagger your children’s inheritance when they become adults to avoid the problems often associated with a sizeable lump sum inheritance.
Contact Long Island Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding estate planning for parents with young children, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.