Minor children

Clients with minor children have special estate planning issues to address. First, the clients should name a guardian or guardians for the custody of their children until they reach majority (age 18). The guardians are typically nominated in the will. The actual appointment of the guardian(s) is made by court order, but the nomination of the guardian(s) by the parent or parents is routinely honored. The guardian makes the day-to-day decisions that the parents would otherwise make if alive, for example, where the children will live, the schools they will attend, etc.

Second, the estate plan should create appropriate trusts for the benefit of the children. Trusts ensure that the children´s inheritance will be properly managed and applied until the children have the financial experience and maturity to manage the assets themselves. If the client has more than one dependent child, we usually recommend a two-stage approach. In the first stage, all the family´s assets are retained in a single trust which provides for the support, health and education of all the children. The use of a single trust provides the flexibility to address differing needs at different ages, not necessarily in equal amounts, as the parents would do if living. In the second stage, each child´s inheritance is held in a separate trust. The trust is designed to gradually give the child more benefit from and responsibility for the trust assets over time. This approach minimizes the risks that a single financial mistake by the child will result in the loss of his or her inheritance.

Occasionally, clients may have a child with a mental or physical disability. Often the clients would like to provide some financial benefit for the child, but want the child to remain eligible for certain state and federal support. This requires the use of a certain type of trust, often called a Supplemental (or Special) Needs Trust, that contributes to the child´s quality of life while keeping the child eligible for government assistance.