Millions of people each year take time out of their busy schedules to meet with a lawyer and create a will. However, each year, even more people consider making a will but never complete the process due to the inability or discomfort of facing mortality. One of the most prevalent misconceptions about estate planning is that a will or trust is only needed once you reach the age of retirement (it’s only for “old people”). Having this mentality is a tremendous mistake. There are countless reasons to establish a living trust or a will, but here is one of the least contemplated and most important reasons: YOUR CHILDREN!
Risking adding yet another reason to worry about your children to a list that most likely climbs into the millions, here are some things to consider if you are a parent to a child under the age of 18:
If you suddenly and unexpectedly pass away, what will happen to your children?
If you are no longer here to take care of your kids, who will?
If someone else is forced to take care of your children, will they be able to afford to provide them will all the opportunities and comforts that you do now?
Are you willing to risk having a stranger, who doesn’t know you or your children, make these decisions for you?
If tragedy strikes and you are no longer with your children, leaving these questions unanswered could be the biggest mistake you ever made. When a parent of a minor child dies without a will, the courts are forced to step in and make parenting decisions for you. Generally speaking, a judge will appoint a temporary guardian of your child whilst your estate is being settled. This process can take up to years to complete. During this time, the court will ask for volunteers to take on the role of parenting for your child, consider the financial ability of these volunteers to parent, and go through the legal process of appointing legal custody. However, what if no one volunteers? The court may have to name your child a ‘ward of the court’ and place them in foster care. As if your children did not have enough emotional baggage resulting from the death of their parent(s), now they will have to adjust to a new living, familial and usually geographic situation.
All of these things can be avoided with one simple step: creating a will or trust. When parents create a will or living trust, they are establishing what is legally termed “guardianship nominations”. Within the will, a parent is able to state who they wish to take care of their child should they suddenly pass away. If you die with a will that contains a guardianship nomination, a judge will automatically appoint that person as the legal guardian of your child. This allows for you to place your child in the best possible situation.
Furthermore, along with a guardianship nomination, a parent can also set aside all his/her finances to be available for use by their child. Within a will or trust, you can establish guidelines for a guardian to be able to spend your money. Examples would be for school, entertainment, necessities, and housing. If a living trust is used, parents can even make provisions allowing their child to remain within their family home with their guardian until they reach the age of 18, at which point the child will be able to help make decisions on what to do with the house (either continue to live there or sell it and use the proceeds).
Consider taking the ultimate step in caring for your children and establish your will or trust today. Life takes unexpected turns, don’t let your child’s future fall between the cracks.