Estate Planning When You Have Minor Children
At McKenzie Legal & Financial, we focus on helping parents protect their families. Estate planning is like life insurance or seat belts, you hope it won’t be necessary any time soon, but its better to be prepared and do everything you can to protect yourself and the ones you love.
Estate planning is a process that can provide many benefits:
Many families find that the process of estate planning, including selecting and talking with their chosen guardian(s), has immediate and tangible benefits. You’ll get peace of mind, a clarity about the family’s place in the community and some even find a new closeness between families and nominated guardians
Let’s look at some important legal facts.
California will restrict the use of your assets:
- If you fail to plan properly, under California law your assets will go to your “heirs at law.” These persons may or may not be those to whom you would have wanted to leave your estate.
- If you have no estate plan, half of your property may be put into a separate court-supervised trust for each of your children, restricting your spouse’s ability to use the money.
- Separate trusts can be a detriment to a child with special needs who encounters an illness, accident, or other problem, because your spouse cannot use your other children’s trusts to meet those needs, no matter how serious or urgent.
- 100% of these assets will be distributed to your child when they turn 18, regardless of maturity level or financial savvy.
California will decide who raises your children:
- If the other parent does not survive or is not custodial (as after some divorces), the court will choose your child’s guardian.
- If your family or friends disagree about who should raise your children, the court will have to step in, resulting in high legal costs and possible family rifts that never heal.
- Your children may even be placed in foster care until the dispute is resolved in favor of a court-appointed guardian.
Estate planning saves money:
- Fees are incurred by the court, attorneys and trustees to administer court-supervised trusts for your kids and to select a guardian.
- You’ll lose up to 8% of the asset value of your estate in probate and that amount is established without subtracting debt.
- Estate taxes could consume a large percentage of your estate, depending upon the law in effect upon your death.
Depending on your preferences, your plan could provide explicit instructions regarding the care of your children if you are unable to care for them. We set up nomination of guardianship papers directed towards doing whatever possible to make sure that your minor children will never be in the hands of an inappropriate person. In case of unexpected emergencies, we also include standby caretaker provisions where you nominate someone of your choosing to act as a standby caretaker during any such time that you are unable to provide such care. This helps avoid having your children end up in the foster care system, even temporarily.
Estate Planning Solutions for Families with Young Children
Your plan can also contain provisions for your children as they grow and develop, for example, you might want to provide money for education or the down payment on a family home. You might also want to set up a special beneficiary inheritance trust for your children to protect their inheritance from divorce or other creditors. Or, your custom-drafted plan could contain any number of alternate provisions, in accordance with your wishes.
Between taxes and probate, your family may spend a lot of time and money that could have been prevented by a solid estate plan. It is so much easier on surviving family members both emotionally and financially if they can consult with a trusted attorney to administer your well-drafted plan.
Consider what you would prefer if you were the surviving spouse, and consider what your spouse would prefer if you were not there. Finally, imagine life for your children with guardians lovingly chosen by you, and with the assets to ensure their comfort and security. A well-drafted estate plan can provide this peace of mind for you.
Please be advised that the information on this site is not meant to be construed as legal advice. If you need legal advice, or for more information about Planning for Minor Children, please contact our office at (562) 594-4200 for a FREE 30-minute consultation!