Planning to Care for Minor Children
Who will take care of my children if I cannot?
One of the most important objective for any person with
minor children is to establish a plan to care for the children.
At a minimum, this will generally include nominating person
to the guardian of the children and designating assets
for their care.
Who should be the guardian of my children?
The guardian is a person nominated to have the physical
care and custody of minor children. Several factors should
be considered before appointing a guardian, including their
age, physical location, relationship to the family, moral
values, financial stability, and any other factor that
may affect their capacity to care for minor children on
a long-term basis. If possible, appoint someone who will
cause the least amount of disruption to the normal lives
of the children. Successor guardians may also be appointed
in case a first choice is not able to act. Nominating a
suitable guardian is a challenging decision for most parents.
Who should handle money intended for the benefit of my
children?
The person who handles money for children will be their
conservator or trustee. This person may or may not also
be the guardian. Many people choose to separate the duties
of guardian and trustee or conservator. This may avoid
placing too much responsibility in the hands of one person,
and may also serve as a check on the appropriate use of
the money that is intended to be used for the children.
Who should be the beneficiary of my life insurance for
my children?
Children may be named as beneficiaries, but the proceeds
will be paid directly to them if they are over the age
of 18. This can have disastrous consequences. Most parents
do not relish the idea of their 18 year old son or daughter
having thousands of dollars to spend with no one to help
them manage it. Nevertheless, this may be exactly what
happens if life insurance is not viewed in relation to
an overall estate plan. Therefore, most parents elect to
establish a trust for the benefit of their children, and
nominate a trustee to manage the funds that are placed
in the trust. The trustee can be designated as the beneficiary
of life insurance proceeds. The trustee is then bound by
law to manage the funds for the benefit of the children.
The funds can be used for any of the children's needs,
including education and health care, until they reach an
age specified in the trust document.
How can I make sure that my children don't get rich too
soon?
A trust can be used to ensure that money is available
for a child's health, education, and support without giving
them direct access to the money until they reach an age
that is specified in the trust. A trustee may be nominated
to manage the trust funds while the children are young,
and then distribute the funds to them in a lump sum, or
over a period of years. A trust has the dual benefit of
providing for management of assets for children while they
are young, and a means to delay distribution of money until
a suitable level of maturity is attained. Trusts are also
highly customizable to meet a variety of unique situations.
What happens if I don't name a guardian in my will?
If you do not nominate a guardian,
then the probate court will appoint one for the children
based upon their "best
interests" as that term is defined by statute. The person
appointed may not be the person you would have chosen.
Nominating a guardian is crucial to the avoid delay and
confusion that may result from court proceedings for appointment
of a guardian.
Can I delegate short term care of my children to another
person?
Yes. By a properly executed power of attorney, a parent
of a minor may delegate to another person, for a period
not exceeding 6 months, any of the parent's powers regarding
care, custody, or property of the minor child. This type
of power of attorney is frequently used while parents are
on vacation or extended job assignments.
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