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Estate planning for parents with minor children is an important process for ensuring your financial legacy is secured for your children’s benefit. Beyond that, a properly designed estate plan for parents with minor children will create a structure of trusted guardians and caregivers who will have the authority and information they need to care for your children in the event that you can’t (due to death, incapacity, or even when you’re traveling). Without proper planning, your children’s future may be uncertain and their well-being may be at risk. In this blog, we will explore the unique but essential steps Pierce Legal takes when crafting an estate plan for parents with minor children. From creating a will to setting up a trust, we’ll cover everything you need to know to secure your children’s future through estate planning. So, whether you’re just starting your family or have been a parent for years, read on to learn how you can protect your legacy and provide for your children.
1. Establish a Trust
Due to the laws surrounding the management of a minor’s inherited funds, establishing a trust for parents with minor children is almost always advisable. Ohio law states that funds received by minors must be placed in trust for the child’s benefit, with a court-appointed guardian overseeing the administration of said trust. Typically, this means a guardianship must be filed with the Probate Court to establish a Guardian of the Estate of the minor child. As with probate, guardianships are very costly, time-consuming, and public. This means anybody can have access to the information about what kind and how much of an inheritance your minor children have received.
An estate plan with a trust created for the benefit of the minor children allows the parents to (1) name a trustee who would be in charge of the management of funds and (2) set up a structure for the how the money would be managed. Moreover, a trust allows for the details of your children’s inheritance to remain private.
2. Nominate a Guardian for the Estate/Person of Your Minor Children
Nominating a guardian is one of the most important steps in estate planning for parents with minor children. A guardian is someone who will take care of your children and make decisions on their behalf if you and your spouse are no longer able to do so. This can happen due to death, disability, or any other unforeseen circumstances. Your estate planning documents should clearly reflect your wishes on who you would like to have appointed as your children’s guardian, as well as identify alternates in the event your first choice cannot serve. Your estate plan should provide nominations for long-term guardians. You should also nominate temporary guardians in the event that you are not immediately available during an emergency.
3. Provide Instructions for the Care of Minor Children
While outside the realm of “traditional” estate planning, providing instructions to your named guardians for the care of your minor children can help ensure your children are raised in accordance with your wishes. At Pierce Legal, we provide a structured document that allows parents an opportunity to outline their wishes regarding all aspects of their minor children’s upbringing, including preferences on their education, spirituality, development and more. This document also details medical history, daily routines, and any special instructions parents would like their guardian to follow. Parents sometimes include special requests or goals for their children. This sometimes includes planning a special trip once they reach a specific age or milestone achievement (like graduating from high school).
4. Designate a Power of Attorney for Minor Children
Designating a power of attorney for minor children is an important part of estate planning for parents. A power of attorney allows you to appoint someone to make legal decisions on behalf of your child in the event that you are unable to do so. There are two types of powers of attorney — of the person and of the estate. A power of attorney of the person allows the agent to make decisions regarding the care (including medical decisions) of your minor children. A power of attorney of the estate allows a person to control your children’s finances in your absence.
Parents with minor children will designate a power of attorney for their children so that a trusted agent can temporarily oversee the care of their children. In many cases, parents will provide the power of attorney over their children to their children’s caregivers when the parents are away on a trip. This document allows their trusted agent the authority to make decisions about the minor children’s care in the event of an emergency.
5. Craft a Complete Estate Plan for You
In addition to the structure created to ensure the continue care of your minor children, Pierce Legal also ensures that your estate plan is complete. This includes providing a succession of agents who can manage your affairs and oversee your finances when you are unable to do so for yourself. From naming people you trust to make medical and financial decisions for you to drafting a will that ensures all of your assets are distributed according to your wishes in the event of your untimely death.
Avoiding probate is often a goal of parents with minor children because it is costly, time-consuming, and public. At Pierce Legal, we provide detailed instructions for funding any trust you’ve created to ensure all of your assets will be administered according to your wishes. This not only protects your legacy but also ensures that financial support needed for your children is not delayed by the process of probate.
At Pierce Legal, we get to know each of our clients, gaining a meaningful understanding and relationship with you that allows us to create a thorough estate planning strategy that will satisfy all of your planning goals and needs. We offer a unique estate planning experience for parents with minor children, providing assurance their children will be cared for should something ever happen to them. Contact us today to schedule a consultation at (330) 588-6115.