There are at least a thousand things you would rather do than think about end-of-life issues and estate planning, right? Making plans for after you’re gone might seem like something that doesn’t need to be done for decades — or it might seem just plain morbid.
But your kids would disagree. Whether you have toddlers, teens or thirtysomethings, they are all hoping that you are being smart about your plans. Consider these three reasons why, for the kids, you need to have a will in place.
1. Kids under 18 will need someone to take care of them.
A legal guardian is named for minor children in the event of the death of both parents. If neither you nor your children’s other parent have a will that names a legal guardian, the state will choose one for you. And the state does not take into consideration things like family feuds or the parenting styles of your family and friends.
Some parents may put off naming a guardian because they have trouble choosing the right person. Although it can be difficult to know who the best person is for the role, this is not a reason to put it off altogether. You need to make a decision so that your children will be provided for in the event that something happens to you. Consider the following when choosing a guardian:
- Is this person willing to raise my children?
- Is this person of legal adult age in your state, which is usually 18 years old?
- Do my children know, respect and love this person?
- Is this person responsible and mature enough to raise my children?
- Is this person healthy and physically capable of taking care of my children?
- Does this person share my beliefs and values?
- Does this person have living space for my children?
- Does this person live near my children’s other family and friends?
You may also want to name a back-up guardian in the will in case the first one is no longer available. Keep in mind that you can name more than one guardian (for example, if you would like your sister and her husband to have custody of your children, they may be co-guardians). You can also name different guardians for each of your children; although most people prefer to keep the children together.
2. Kids under 18 will need someone to manage their finances.
Minors cannot legally own property or assets (including money exceeding a few thousand dollars, depending on state laws). If you have minor children, then, you will want to name a “guardian of the estate.” This person manages all assets that make up your estate, providing for the children using money from their inheritance and protecting their financial interests until they are 18.
If you would like additional control of the terms under which your minor children receive assets, you may want to consider creating a testamentary trust. This is a trust set up within your will that dictates how some or all of your estate’s assets will be distributed. You choose a trustee to manage the funds until a specific time, when the assets will pass to a beneficiary or beneficiaries (your children). Note that, with a testamentary trust, the assets do not automatically pass to beneficiaries when they turn 18. You can stipulate specific terms for when they receive the money, such as a different age (e.g., 21) or an event (e.g., when they graduate from college).
3. Kids don’t want to fight with one another after you are gone.
The death of a parent is an emotional time for children of any age. Tensions can run high, and even the most loving of adult siblings have been known to fight about a parent’s wishes. Plan to alleviate the stress and guesswork for them by creating a detailed estate plan. List out clearly who gets what assets, from the big ones (property, stocks) to the small (your teapot collection, books).
Those with more involved estates or more complicated family situations may want to consider creating a revocable living trust. This kind of trust can be changed or revoked at any time during your lifetime. It details who will manage the trust assets, the terms for distributing and managing the assets, and who receives the assets. One major benefit of a revocable living trust is that, unlike a will, it does not have to go through probate, the legal process required to prove that your will is authentic before assets can be distributed. Depending on state laws, probate can take anywhere from a few months to more than a year and is a public process, which can be painful if there are any issues between family members.
After you have created a will, make sure you keep it updated. You do not want to be the parent who creates a will that provides for your first-born but leaves nothing for your younger children because you forgot to update it when they were born. When a major life event happens, you should always revisit your will and, with the help of an attorney, make sure your children and loved ones are provided for.