Estate Planning for Parents of Minor Children
Estate planning for new parents (and those more experienced), creating an estate plan is a necessary step to ensure the welfare of your children should you pass before they are fully grown. Your estate plan outlines your wishes by putting everything in writing with specific legal documents. Your estate plan ensures that you have the final say on what happens to your children, your assets, and your remains upon your death. A properly drafted estate plan for parents of minor child must include a Last Will and Testament or a Living Trust containing both a provision to protect your children’s inheritance until they reach an age of your designation and a designated guardian for your children should you pass prior to their reaching the age of majority, a durable power of attorney, and an advanced healthcare directive containing a HIPAA release.
Last Will and Testament or Living Trust
The first document that a parent of minor children needs to have in place is a testamentary document, such as a Last Will and Testament or a Living Trust. Both documents will provide for the disposition of your assets upon your death. Our estate planning lawyer can assist with these documents.
Regardless of the testamentary document a parent chooses, it must contain two specific provisions to properly protect your children’s interests. First, the document must have a trust provision holding your children’s inheritance in trust until they reach an age specified by you. This is particularly important as most parents do not want their children to inherit valuable assets on their eighteenth birthday (which is what will happen without the trust provision). The trust provision must also name a trustee whose job it will be is to protect your children’s inheritance, and manage it for them until they reach the age of your choosing.
Secondly, the testamentary document must name a guardian for your children in the event that you pass prior to their turning eighteen years of age. The guardian will serve in your stead after your death, making all necessary legal, medical, and educational decisions for your children. If you fail to name a guardian, a probate court will have to determine who will become the guardian of your children. The court looks to family first; it may not select the same family member that you would have for your children, and if you want someone other than family to serve as your children’s guardian you absolutely must nominate them in your testamentary document.
Finally, your testamentary document should detail your wishes for your remains.
For parents of minor children, a simple will simply not do! Any attorney who tells you otherwise is misinformed and doing their clients a disservice.
Durable Power of Attorney
A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act in your behalf. These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help. The general power of attorney is an effective tool if you will be out of the country and need someone to handle certain matters, or when you are physically or mentally incapable of managing your affairs. A general power of attorney is often included in an estate plan to make sure someone can handle financial matters. It is essential to remember that the power of attorney ceases to be effective at the moment of your death. Once you pass, the executor set forth in your will, or the trustee set forth in your living trust, will be the only person who can act on your estate’s behalf.
Advanced Healthcare Directive
An advanced healthcare directive is a power of attorney for medical purposes. Your attorney-in-fact will be designated to make medical decisions if you are unable to do so for yourself. A properly drafted Advanced Healthcare Directive must contain a HIPAA release, allowing your medical care providers to discuss your medical history with your attorney-in-fact.