There are several points that parents of minors should take into account when they are creating an estate plan. These provisions ensure that there will be someone to care for their children and funds that are available for this purpose.
Important documents
Parents need a power of attorney and an advance health care directive that will appoint people to handle their financial and health care matters and decision making if they are unable to. Making sure that someone has access to and is able to use their funds ensures that there is money to take care of the child’s needs even if the parent is too injured or ill for financial decision-making.
Guardians and trustees
Parents can name a guardian for their children in their will. Courts are not bound by this if they think the parent has made a choice that is not in the child’s best interest, but they are more constrained when it comes to a parent’s choice of trustee, the person who manages money for the child. The trustee can also be the guardian, or it can be someone different. Because minors cannot inherit property, it is necessary for an adult to be able to manage the money for them. However, a trustee could also continue to manage the money after the child is an adult if the parent wishes.
Life insurance
Life insurance is one way for parents to protect their children financially even if they do not have much money. It is important to purchase enough cover for all the child’s needs.
Every adult should consider creating an estate plan even if they have few assets, but it becomes particularly important once there are children. Timely and thorough estate planning can help ensure that they and other loved ones are cared for.
