In the age of COVID-19, ensuring that your children are protected in the event of your passing is more important than ever. Although many people believe that naming a guardian in their will is sufficient, there are other estate planning tools that can help to ensure your minor children’s inheritance is properly managed. An experienced trusts attorney can help you understand your options and assist you with creating an estate plan that clearly outlines your wishes and protects your children’s interests.
Leaving Assets to Minor Heirs
Parents who are married typically leave all their assets to their spouse, but what happens if you are a single parent or you and your spouse pass away at the same time? When creating a will and estate plan, it is critical to consider different scenarios that may affect your minor children. Although minors can be beneficiaries, legally they cannot own property until they turn 18. In addition to naming a guardian for them, you need to ensure that any assets you want them to receive are properly managed until they are adults. There are several ways to do this. Your estate planning lawyer can assess your specific situation and recommend the options that provide the most benefit.
Why You Should Provide for Asset Management for Minor Heirs
If you do not name someone to manage assets for your minor children, the probate court will appoint a guardian of the estate to oversee them until minor heirs come of age. This means that if you die you have no control over who will manage your children’s assets. The person who is appointed by the court may not be a good fit or could mismanage assets. An attorney can explain the probate process to you so you have a better understanding of what is involved and why naming someone to manage your children’s assets ahead of time is advisable.
Asset Management Options for Minors
There are several ways to arrange for someone to manage your minor child’s inheritance. Some of the most common include:
Naming a property guardian in your will. If you appoint someone to be a property guardian in your will, when your will is validated in probate the court will appoint that person as your child’s estate guardian.
Naming a custodian under the Pennsylvania Uniform Transfers to Minors Act. The PAUTMA enables you to select a custodian to manage assets you leave to your children up to the age of 21. You may do this in your will, living trust, or when naming a beneficiary on a life insurance policy. It is vital to make sure this done correctly, so it is best to have an attorney assist you.
Setting up trusts. Creating a family trust for all your children or individual trusts for each child can help to ensure your wishes are carried out according to your specific instructions. Any trustee you name is required to act in your children’s best interests, whether it involves their education, health, living expenses or any other issues. It is important to keep in mind that a trustee has more responsibilities than a custodian, such as filing annual tax returns for the trust.
Do you need assistance with estate planning? The team at Carosella & Associates can help you create a plan that protects your children’s financial future.