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Estate Planning for Families with Young Children
People frequently make the mistake of assuming that unless they have accumulated a significant amount of wealth an estate plan isn’t necessary. If you are the parent of a minor child you need an estate plan regardless of the value of your estate assets because your most valuable asset is your child.Nominating a Guardian
Whether you are just starting out in life and have little in the way of material assets or are well-established with a large estate, an estate plan allows you to protect your most precious asset by the nomination of a guardian in your Last Will and Testament. If tragedy strikes while your child is still young, taking you away from your child, who will be appointed as your child’s legal guardian? Your Will is the only opportunity you have to let a court know who you choose to be the guardian for your child.
You may be counting on your child’s other parent to continue to care for your child in the event of your death; however, he or she could be unwilling or unable to take over legal responsibility for your child in the event of your death. Ultimately, a court will decide who to appoint as your child’s guardian, though the court will be heavily influenced by your wishes as expressed by a nomination in your Will.Creating a Trust for a Minor
Your minor child cannot inherit directly from your estate; however, you can provide for your child financially by creating a trust. Any, or all, of your assets can be transferred into the trust now or at the time of your death. You can also arrange for proceeds of a life insurance policy to be transferred into a trust when you die. Your child is then named as the beneficiary of the trust, allowing you to provide for your child long after you are no longer here to do so in person.
You will be required to name a trustee to oversee the day to day operation of the trust. The trustee can also be your child’s guardian or you may choose to appoint a professional trustee, further ensuring that the trust funds are prudently invested and protected. The terms you create will determine when disbursements are made and the amount of the trust disbursements. When your child reaches the age of majority, typically age 18, the remaining trust funds can be disbursed to your child or you may decide to wait and provide for staggered disbursements as your child matures.
The estate planning attorneys at Sowards Law Firm understand how important it is to families with young children to protect and provide for those children through the creation of a comprehensive estate plan. We are proud to help families from areas such as Union City, San Jose and San Carlos to create estate plans that reflect their needs and wishes. To get started on your estate plan, contact the firm today by calling 408-371-6000.