Estate Planning for Parents of Young Children

POST DATE: 4.19.22
Ccha  Estate Planning

Life with young children is busy. Between their school, sports, and social activities, there’s enough going on to continually put off estate planning. But what would your children do if you were in an accident? What happens to a child when a parent dies? If you and your spouse both passed away, who would care for your children? What would their future look like? It’s easy to consume yourself with the demands of daily life, but planning for the future deserves your immediate attention.

CCHA estate planning for parents of small children blog

Why Is Estate Planning Important for Parents of Young Children?

Estate planning is an opportunity to create the future you want for your children if something should happen to you. Without a plan in place, you may be allowing state law to determine the distribution of your property, a decision that could impact your spouse and children for the rest of their lives. For example, if both parents die, a court would need to appoint a guardian to raise your children and to manage their inheritance. By writing an estate plan, you can decide who will have custody of your children and can formally facilitate how you want them to be provided for.

Parents often think they don’t have enough money or assets to warrant an estate plan, but that is often not true. Estate planning is important for anyone who wants to provide for their family and determine how their property should be managed and distributed upon their death. Even if you’re not yet a parent but hoping to be, estate planning is one of the things to talk about before having a baby.

What Happens to a Child When a Parent Dies?

Typically, when one parent dies, the surviving parent steps in and cares for the child. However, if both parents pass away, it is necessary for a court to appoint a guardian for any minor children. By having a will, parents can make their chosen guardian known, making it a simpler process when it comes to getting that guardian appointed and helping make the transition easier for their children.

What Estate Planning Tools Are Available for Parents?

There are many estate planning tools and strategies that can help provide for your children’s future. A comprehensive estate plan typically includes:

  • Last Will and Testament;
  • Durable Power of Attorney;
  • Health Care Representative; and
  • Living Will.

Your will may also include a Testamentary Trust, built into your Last Will and Testament, to provide for your minor children until they reach an appropriate age, and a guardian nomination. At CCHA, we create custom estate plans that satisfy your goals.

How to Appoint a Guardian for My Child If I Die?

A last will and testament serves multiple purposes. One of those purposes is to appoint a guardian for your children. You can also use it to transfer assets to certain people and appoint an personal representative who will administer your estate.

How Can I Manage My Child's Inheritance?

Before your child becomes an adult, they cannot legally inherit anything from your estate. Without a proper estate plan establishing a minor’s testamentary trust, a guardian of your minor’s estate would have to be appointed by a court to manage such funds until your minor child reaches age 18. By creating an estate plan, you can instead use a testamentary trust to establish a structure for when your child will receive such funds and appoint a trustee to manage the funds for your child. The second option gives you control and allows you to provide instructions on how trust assets should be managed. In other words, you can limit what the money is used for or incrementally distribute funds throughout your children’s lives.

How Do I Plan for Incapacity?

Estate planning can also help you plan for incapacity. If both you and your spouse were to have debilitating injuries from an accident or a disease, who would make financial and medical decisions for you? A durable power of attorney is used to designate a trusted person to handle financial matters on your behalf. With a health care representative appointment,, you can also appoint someone to make medical decisions for you and designate specific wishes regarding end-of-life care through a living will.

How Often Should I Update My Estate Plan?

An estate plan is not something you set up and forget about. Just as life evolves and changes, so should your estate plan. The general rule is to revisit your estate planning documents every year or whenever a significant life event occurs. For example, if you have another child, get a divorce, retire, or receive a significant inheritance, contact an estate planning attorney to update your documents.

Contact the Estate Planning Attorneys at Church Church Hittle + Antrim

For over 140 years, we have been helping clients with their estate planning needs. Call one of our six offices or go online to request a consultation with one of our estate planning experts. Let us help you provide for your family and plan your legacy.