There is no better reason to have an estate plan in place than for the well being of your young children. Often, young parents avoid estate planning because they believe that they are too young, healthy, or can’t afford an attorney. However, estate planning is a vital part of caring for your young child.
The most important part of an estate plan for young parents is naming a guardian for the children. The guardian is the person who will care for the children should both parents die before the children reach the age of majority. Select someone you trust to raise your children, and discuss your selection with the person before finalizing your will. When making your selection consider the age of the person, and whether they will be able to provide adequate care. Name a secondary guardian in the event that the primary guardian is unable or unwilling to serve.
It is also important to provide for the financial future of your children. If both parents die before the children reach the age of majority, the children will not be able to receive assets outright. Rather, a person must be designated to handle the assets for the children. This person will have the authority to spend the children’s assets as they believe the parents would have under similar circumstances.
Often, parents who do create estate plans create a trust to hold assets for their children until they reach the age of 25. Parents are beginning to scatter trust distributions, as well, so that children receive small portions of money throughout their adult lives. This way, if a child is irresponsible at the age of 25, he or she will still receive some inheritance but will not squander the entire amount.