Make no mistake: Estate Planning with children is essential. Most children are simply unable to fight off the bad fortune that can happen after you die, as they may have to wait years for the money you’ve set aside for them or, even worse, they could end up in the hands of an uncaring, incapable guardian.
If you’re like most parents, the thought of dying unexpectedly and leaving children behind is nothing short of a terrifying nightmare. As unthinkable as this situation may be, it happens more often than it should, and without an Estate Plan in place, your kids may have lifelong repercussions.
But if you’re ready to secure their future with a carefully crafted Estate Plan, the process involves appointing people to serve in critical roles and mapping out your distribution of assets, and here are three problems you’ll need to solve right away:
1. Who will care for your children?
Some parents are in total agreement over who they would like to care for their kids if misfortune strikes. Others can’t decide; finding themselves locked in an ongoing argument over who has the kindness, resources and common sense to raise their children. Whatever your situation, a choice must be made.
But before you determine who you’ll mark down as a guardian in your Will, Trust or other Estate Planning documents, here are just three things you need to consider about your potential caretaker:
- Stability is important. Does your proposed guardian live close to your kids’ school, so your children can keep their friends and teachers?
- If you’ve raised your children in a religious household, will your guardian continue that legacy and regularly take them to church, temple, mosque or some other place of worship?
- Will your guardian live close enough to family members so your children can continue relationships with their grandparents, cousins or other relatives?
A great choice for a guardian understands the gravity of what you’re asking of them and is 100% committed to nurturing, supporting and guiding your children through a life without you. Make sure the friend or family member you name in your Estate Planning documents has the foresight and resources to build the positive environment your children deserve.
2. How will your children receive your assets?
If you’ve feathered your nest with real estate, money or other assets, you’ll naturally want your children to receive financial support right away if something terrible happens. What you don’t want is to grant your children access to these resources all at once, only to have them squander money you’ve set aside for college on a trendy new car or other expensive item du jour.
With a properly implemented Revocable Living Trust, you can chart a financial path for your children so that the money and assets you leave them last as long as possible. You can set things up so your kids receive a specific amount of money for education, health and other expenses, or you can release your assets to them in increments at ages 25, 30 or 35.
As much as we all hope our children will be cautious with money, even disciplined kids (and many adults) will wrestle with responsibility if they suddenly receive a large sum of income. Your Living Trust is a key piece of the financial puzzle for your children.
3. Who will administer your Estate?
In the hallowed words of comic book legend Stan Lee, with great power comes great responsibility. And the Trustee of your estate will be one of the most responsible – and powerful – people in your Estate ecosystem. Your Trustee should not only be reliable, but ready to spring into action if the unfortunate time ever comes.
It’s a tall order. If you pass away, your Trustee, whether it’s a friend, family member or professional fiduciary, will be neck-deep in a long list of time-sensitive tasks, from making certain your debts are paid off to representing your family in Probate or another court proceeding.
For the person who routinely works long hours, being a Trustee may be too burdensome, and the same goes for people who are disorganized, unable to communicate well, or incapable of diffusing tension among your family members.
Ultimately, your Trustee must do right by your children, parachuting in to meet deadlines, gather documents, and distribute your assets in a swift manner. Finding the person who checks off all the right boxes is an extraordinary challenge for many parents, which is why so many choose attorneys for their probate and trust administration.
If you’re struggling to plan for a tragic event that suddenly leaves your children parentless, you’re not alone: Some studies show that more than 50% of people haven’t even created a Will. But as a parent, you have a special responsibility to craft an Estate Plan that charts the lives of your children, because once your life ends, your kids must carry on.