If recent events have taught us nothing else, they have reinforced the truth that death does not just come for the elderly. It can come for any of us, and most will not know it’s approaching until it’s there. Unfortunately, many younger couples do not consider this and don’t have estate plans in place. That can leave their families coping with the unimaginable when tragedy strikes.
Estate planning, of course, is primarily to plan for what happens when someone passes. For young families that includes planning for their children; how their inheritance will be managed; who will be responsible for them until they’re grown. Without a will, those decisions are up to the family, state agencies, and, ultimately, the courts.
Through a will, however, parents can direct that the inheritance stays in trust for the children and name the trustee who manages the inheritance. They can also nominate a guardian to look out for the children’s needs. Guardians nominated in a will are usually appointed, but the court has final say if there’s reason to differ.
The ability to set up a trust for the children through the will means that management of the inheritance doesn’t need to be supervised by the court as it watches over the guardian. The guardian will only have responsibility for the children’s physical care. The trustee manages the inheritance and applies it for the children’s benefit outside of the court’s direct scrutiny. The will can specify how the trustee distributes the inheritance in detail, but most wills follow standard terms like using the trust for the children’s “health, education, maintenance and support.” That gives the trustee guidelines without being too restrictive or permissive.
The will can terminate the children’s trust at a certain age, in stages, or say that it lasts for the children’s lifetimes. Most wills opt for terminating the trust all at once, like at age 21 or 25 so that the child has reached adulthood, and, hopefully, reached some degree of maturity. Larger inheritances may be distributed in stages so the child can learn from mistakes made with the initial distributions. And sometimes, when the parents know the child is unlikely to ever make good choices, the trust lasts for the child’s lifetime. This option, it should be noted, is often applied to adult children as well as minors.
Apart from planning for the children, parents should look to their own planing if something befell them. It is important for young couples to have durable power of attorney, designation of health care surrogate, and living will documents prepared so that they can take care of each other if the unthinkable happens, or so that a third party can step in if they both need help.
If we didn’t before, we now know that tragedy is only a step away from any of us, and we owe it to ourselves and our loved ones to make sure we have the legal documents in place to make handling that tragedy as smooth as possible.