Importance of Estate Planning Documents When You Have Minor Children
Crafting estate planning documents isn’t just for avoiding estate taxes upon death. Although, many wealthy people view them in this light.
An estate plan is far more important for other things particularly when you have minor children. This is true whether you are wealthy or not. Sure, most young people don’t think about estate plans or estate planning documents. Those who have young children should.
Estate planning documents typically consists of a will, a power of attorney, and an advance medical directive. When you have minor children, these legal documents will express your wishes for their care if something happens to you and/or your spouse.
What To Consider Regarding Minor Children When Creating Your Estate Plan
In most cases, married couples leave their estates to each other. After the first spouse dies, the survivor uses those assets to care for the children.
But what happens if both parents die at the same time and leave minor children? This occurs more often than people expect. During the COVID-19 pandemic, hundreds of thousands of children lost parents.
Situations like this show why an estate plan is essential.
For instance, the following issues are those that need to be considered in the estate planning documents of young parents when making their will:
Who will care for minor children in the event both parents die simultaneously?
When choosing a guardian, think through several key factors. Consider how close they live to your children. Evaluate their lifestyle, values, and financial stability. Raising children is a major responsibility. Always ask the person if they are willing to serve before naming them.
You also need a plan for how your assets will transfer if both parents pass away. Without an estate plan, children may inherit assets directly. These funds are often held in a restricted account until they reach adulthood.
A more controlled option is to create a minor’s trust. In this setup, you name a trustee to manage and distribute the assets. The trustee can use funds for health, education, maintenance, and support. This approach provides structure and protection over time.
Even if you have modest assets, planning still matters. You should clearly designate how those resources support your children. Different strategies exist, depending on your situation.
What if you have a child with functional needs?
This is an even more important consideration for establishing an estate plan as young parents.
Power Of Attorney And Medical Directive
Next, you’ll need to designate a power of attorney and execute an advance medical directive to complete your estate plan.
You appoint a Power of Attorney to act on your behalf for medical and financial matters. For instance, if you are still alive but unable to make decisions on your own behalf the Power of Attorney will make those decisions for you. Especially when you have minor children, it’s important to have someone who can and will make these kinds of decisions according to your wishes.
The final piece of your estate plan is an advance medical directive.
This document sets forth your last wishes in regard to end-of-life situations. This document differs from a medical power of attorney in that the directive only governs a situation where the declarant, or maker of the advance medical directive, is incompetent, and a doctor has certified that the declarant is in a state of permanent unconsciousness or has an end-stage medical condition.
Prepare For The Worst Expect The Best
None of us knows what will happen to us in this life. Tragedy strikes swiftly and totally unexpectedly. If you have young children, it’s so important to draft an estate plan to ensure that they will be cared for according to your wishes and will be placed with an appropriate guardian. It’s so much more comforting to be prepared. If you never have to use your estate plan, so much the better.
Give our offices a call today. Many people think you must be wealthy or have many assets to have an estate plan, but that is not the case. The care of minor children and children with functional needs is even more important.
Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!
