Although fatal illnesses and accidents happen every day, nobody on the face of this earth believes they could be the victims. The younger you are, the less likely it seems, and being parents to young children can only make the possibility that much more unthinkable. However, if your offspring are under the age of legal consent, protecting their futures against your possible loss is really your greatest responsibility. This means giving your undivided consideration to two vital areas: their guardianship and their financial future.
Who Will Take Care of Your Children?
Unless you’ve made specific arrangements to the contrary, your children’s future living arrangements will depend in large part upon the makeup of your family circle. In a traditional two-parent household, their custody will normally revert to the surviving spouse. In a blended family, the legal question becomes somewhat murkier, and if you are a single parent, you need to consider that you are only half of your children’s biological picture. Should anything happen to you, a surviving parent may have some say in the matter.
Of course, if neither parent should survive, the prospects will dim considerably. Unless you’ve specified otherwise, the probate court will determine your children’s fate, choosing guardians for their care and inheritance until they have reached the age of legal consent. If so, administrative costs can mount up quickly, depleting the worth of any assets held in your children’s name.
There is an alternative. It involves doing the intelligent thing and making your wishes known with a set of specific instructions. At San Diego Legacy Law, we can show you how.
Protecting your children's future
A well-thought-out will or trust allows you to designate your choice of guardian for your children and their assets in the event of your untimely demise. This will give you the peace of mind that comes from knowing that despite the unfortunate circumstances, your children will receive the type of care you’d want.
In choosing a prospective guardian, you’ll want to ensure that the person you designate:
- Is of legal age in your state.
- Has a genuine interest in the welfare of your children.
- Shares your religious or moral beliefs.
In addition to naming a personal guardian, you may want to name an alternate in case of emergency. You can also choose to name two halves of a stable couple to serve as co-parents.
Money will also play a role. Unless you can provide it in sufficient amounts to cover the costs of raising your children, you’ll want to be sure that the person you designate to care for them can afford to take over the job.
Planning your children's financial future
Making provisions for your children’s future means more than simply choosing someone to bring them up. At San Diego Legacy Law, we emphasize the importance of protecting any property or money that they stand to inherit.
Many people correctly fear that money left outright to a minor is by definition in danger of being wasted by the child or confiscated by a surviving parent, guardian or relative. A trust or custodial account will help to prevent this by stipulating the conditions under which the money will be held and eventually distributed.
For instance, your options in this regard include setting up:
- A completely discretionary trust that protects the assets throughout a beneficiary’s lifetime, giving the trustee absolute discretion concerning their administration.
- A less restrictive discretionary trust in which the trustee can access the money on the beneficiary’s behalf without allowing anyone else to get at it.
- A revocable living trust designating a successor trustee to manage your children’s assets until they reach the age of 25 or more. This gives them the chance to complete their educations and embark on adult lives before gaining access to what might amount to a considerable estate.
- A family trust in which the trustee keeps the estate intact until the youngest beneficiary has reached the age of 21 or 25, then sells and divides the assets equally to all.
- A staggered trust that distributes its assets in stages over an extended period.
Despite their apparent differences, all distribution methods serve one valuable purpose: that of ensuring the protection of your children’s inheritance while allowing you complete control over when, where and how they eventually receive it.