One of the many duties of parenting is making sure your children are provided for if something were to happen to you while your children are still minors. There are various factors to consider when making sure your little ones would be cared for in the way you’d want. Which leads to specific estate planning for minor children.
The Loew Law Group in San Mateo, CA, can help parents plan for their children’s future in a way that protects parents’ wishes and provides for their children’s financial needs. Contact us today to learn more about how our estate planning attorneys can help protect your minor children.
Estate Planning for Minor Children Protects Your Financial Legacy
In 2020, only those with an estate larger than $11.58 million were subject to federal estate taxation. However, there are many important reasons to consider an estate plan that don’t have anything to do with taxes. Estate plans provide a means for you to protect the money you’ve earned so you can pass it on to your children.
Estate Planning Ahead Protects Your Minor Children
You should not leave your children’s future in the hands of a court. A judge may or may not make the decisions you would want them to make. Who knows better than you what your children will need and how you would want them to be raised?
The Importance of Naming a Guardian
In a traditional, nuclear family, it seems natural that the surviving parent would remain the guardian of the children. But what happens if both parents die? Who will raise the children and ensure their well-being?
One of the most crucial decisions you will make in estate planning will be the choice of a guardian for your children. Guardians matter because they will be responsible for raising your children and handling their finances until they come of age.
When choosing a guardian for your children, you should:
- Consider whether the guardian’s religious beliefs, moral values, and life goals align with what you want your children exposed to
- Appoint only one family member (not their spouse), in case of divorce or death
- Ensure there will be assets available from your children’s inheritance to cover costs incurred by the guardian
- Ask permission of any potential guardian before including them in your estate plans
Once you’ve appointed your guardian, careful consideration must be given to any inheritance that will be left to your children.
Establishing a Trust
If a person dies in California and has no estate plan, their assets will be distributed using a predetermined formula established under California law. A well-designed estate plan lets you decide on the amount that will be distributed to your children.
Additionally, you can decide how the funds will be distributed. Different options are available to you to determine how inheritances will be managed.
Unless otherwise specified, most inheritances are distributed outright, or all at once, when a child reaches the age of majority. In most jurisdictions, this is 18 years of age. Dangers of outright distributions may include divorce, lawsuits, bankruptcies, or squandering.
Considering other options for wealth distribution may help protect your hard-earned money.
Protection for the money you’ve provided for your children can be increased by implementing staggered distributions. In this scenario, distributions begin only when your child reaches a certain age. For example, your child’s inheritance could be paid out in thirds as they reach the ages of 21, 25, and 30.
Inheritances can be placed in discretionary trusts to protect the money for your children regardless of their age. In these trusts, you can establish any terms about when funds are available to your child. If a discretionary trust is well-designed, it can provide money for your children and even their children. There is a lot of flexibility and control made available through discretionary trust planning.
What if family or financial circumstances change after estate planning for minor children?
When you’re planning for your children’s future, you make the best decisions you can at any given time. Financial situations, family relationships, and circumstances with your children change, and that is simply part of life. Establishing an estate plan to protect your children doesn’t mean it can’t be changed if future circumstances require it.
The Loew Law Group can help you create an initial estate plan that meets your needs for today. If your circumstances are different in the future, you can modify your estate plan to reflect those changes.
For Estate Plans to Protect Your Minor Children in San Mateo, Call the Loew Law Group
If you have questions about a new estate plan for your minor children, or if you need help modifying an existing plan, we can help. The estate planning lawyers at the Loew Law Group are ready to help ensure your financial legacy is protected for your children.
Call us today to learn how we can assist in creating a financial plan for today, and how we can provide flexibility for the future.
Serving Belmont, Burlingame, Foster City, Redwood City, Hillsborough and all San Mateo County California with their minor children estate planning.