Parents of minor children need an estate plan to protect their children’s future. The article “Estate Planning Series: For Parents” from Colorado Parent explains what can happen if a family with young children doesn’t have an estate plan.
Estate planning is more than distributing assets or even planning to avoid an estate going through probate. A last will and testament is the legal document used to name a guardian for minor children if both parents should die or become incapacitated.
Without a will, the court appoints someone as the children’s guardian. Most people would instead make this decision themselves, naming a person they trust and know will help their children thrive. If parents name their own parents or anyone in a generation above them, they need to carefully consider whether or not those people can raise the children as they age.
Parents don’t have to name a family member to be their children’s guardian. Parents may get some push-back on this decision. However, they know their children and family best. It may be better for children to be raised by a trusted friend who has agreed to take on this task than the children’s grandparents. Family members who are perfectly capable of dealing with toddlers may be too elderly when children reach their teenage years and need a different kind of parenting.
A Power of Attorney is essential for everyone over 18. When someone becomes incapacitated, another person can take over the business of their lives, maintaining a house and managing day-to-day bill paying. Without a POA, a family member must have a guardianship or conservatorship approved by a judge. The judge might appoint a professional guardian who doesn’t know the person or their family or a family member who has a fraught relationship with the incapacitated person.
An estate planning attorney can create a POA to suit individual needs. A document downloaded from the internet is likely to be riddled with potential disasters, including the possibility of giving someone more decision-making power than you would have wanted.
Estate planning for families with young children also addresses how the children’s living expenses will be paid. If life insurance is purchased, what happens to the proceeds if one of the parents dies? If a child is the life insurance beneficiary, a court-appointed custodian may be appointed to receive and manage the funds. By placing the life insurance into a trust and naming a trustee, the parent can be confident the proceeds will be used solely for the child’s upbringing.
These are just a few issues parents must consider when creating an estate plan with young children in mind. Speak with an experienced estate planning attorney to protect your family and their future. Once it’s done, you can return your attention to all of the ups and downs of parenting.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: Colorado Parent (December 2024) “Estate Planning Series: For Parents”
