Clients with minor children know the importance of selecting who will take care of their children should an accident befall them. Special provisions in your will or trust for minors is also important for those with adult children or other adult beneficiaries. We cannot predict the future, so our estate plans should cover a gift to a minor, even if we think all of beneficiaries are adults.
Guardianships. A parent with minor children should select a primary and an alternate guardian. If there is some reason that the child’s other, natural parent should not gain custody, this should be disclosed to the attorney. The nomination of the guardian is the parent’s “voice from beyond the grave” to let the court know whom you believe will best care for your child. Absent a selection by the parent, the court can only use the order of priority established by the probate code, who steps forward for guardianship and the court investigator to determine who should care for your children. This may not be someone you would want to care for your child. If you have trusted friends whom you would like to care for your children instead of a family member, they will likely not gain custody without a guardianship nomination if a family member also applies for custody.
Gifts for minors. Establishing who will act as custodian or trustee for a minor who receives a gift under your estate plan is essential. Without an election, any gift over $10,000 requires court approval over the custodian, unless it is placed in a blocked account. For large amount of money, it is also important to direct the trustee the age or ages the money should be distributed to the minor. Absent this selection, the minor will automatically receive the money outright upon turning eighteen.
Many clients with adult children believe that this planning is unnecessary. An estate plan is often written ten, twenty, or even thirty years before its ultimate execution. Adult children may predecease you and the portion that would have gone to your son or daughter is now divided amongst their children. Plan for this contingency and make it as easy as possible on your heirs.