Five Reasons Why Parents of Young Children Need Estate Planning
If you are a parent of young children, getting your estate plans in order can help you ensure that your minor children will be protected in the event the unthinkable happens. Estate planning is critically important for parents with minor children because:
- It allows you to select a guardian for your children in the event of your death or incapacity. Without guidance from you about who should serve as your children’s guardian, a judge who doesn’t know your children, values, or family dynamics will make the choice for you.
- It allows you to decide how your assets will be distributed to your children. If your children are orphaned, Texas’ intestacy statutes direct your property will be distributed to them in equal shares. While this may sound desirable, it is important to remember that the financial needs of children are sometimes not equal. For example a very young child or a child with special needs may sometimes require more care than an older healthy child. Estate planning allows parents to dictate how their assets will be distributed, rather than automatically having assets divided equally.
- It allows you to create a trust for the benefit of minor children. If you do not have a trust, it may be necessary for the probate court to create a guardianship of the estate to oversee all aspects of the management of the assets, including the investment, expenditures and distributions to the minor children.This is typically an expensive and cumbersome process that is easily avoided by establishing a trust for your minor children.
- It allows you to determine who will manage the assets you leave behind for your children. Without any guidance from you, a judge who doesn’t know you or your financial values will make that decision for you.
- It allows you to decide when distributions of assets will be made to your children. If a court creates a guardianship of the estate, your children’s share of your assets will be distributed to them when they become adults. Imagine what you would have done with $5,000, $50,000, or $500,000 when you were 18 years old. Most likely, you would not have had the skills or foresight to manage those assets wisely. Keeping assets in a trust and disbursing them over a period of years allows your children time to mature and develop the skills necessary to manage the assets you have left to them.
Without estate planning, you forfeit the opportunity to make these important decisions. If you have minor children, having an estate plan in place puts you in control of decisions that will impact your children’s lives.