Stages of Planning
Married with Minor Children
Planning for Their Future
The next stage of financial and estate planning occurs when a married couple has minor children.
Because a sudden illness and/or passing may incapacitate you as a parent, planning should be put in place to nominate a guardian for your minor children as well as someone to manage your assets for your children.
Instead of a simple Will, the husband and wife could prepare a Will with Testamentary Trust provisions for minor children along with the Durable Financial Power of Attorney, Durable Power of Attorney for Health Care and Living Will. The Will has two provisions for the children: 1) a suggestion of guardian over the physical placement of the children; and 2) an appointment of a Trustee over the monetary assets of the children. Remember, ongoing Probate Court jurisdiction requires formalities that increase the cost of administration.
If both parents were to pass away suddenly, the court would consider appointing the guardian over the person of the children for purposes of health, maintenance and welfare of the children. This would enable the guardian to deal with day to day matters such as school placement, medical treatment, and other similar matters.
As an alternative, parents may also consider a Living Trust with provisions for minor children similar to those described in the Testamentary Trust. A Living Trust is a contract that is independent of Probate Court jurisdiction and therefore streamlines the work considerably. Normally, a Living Trust is utilized when the Successor Trustees are persons who the parents trust with the proceeds from their estates. Again, the guardian would be suggested in the Will and appointed by the court over the person, but there is limited ongoing court contact with the guardianship over a person as opposed to a guardianship over an estate or a Testamentary Trust administration.
The foregoing stages of planning should give you an overall idea of when it is important to see your financial and/or estate planner for purposes of creating and/or updating your estate plan to achieve the maximum amount of income tax, estate tax, and unnecessary governmental interference.
Contact R.F. Meyer & Associates today to schedule an appointment to discuss your estate planning needs.