ESTATE PLANNING WHEN YOU HAVE MINOR CHILDREN
There are different levels of estate planning. At the most basic level, people need to leave directives as to who will care for their children, in the event they are no longer able to do so themselves. Some states break custody of a minor into two categories; physical custody of the child and custody of their financial resources. The most basic level of estate planning is to name those people. There can be a different person for each role, and some people like the “oversight” that this type of setup can provide. Of course, you need to consider the people involved, their personalities and the fact that the person or persons physically caring for the child are going to be beholden to the conservator for financial assistance. You want to choose people who can work together to further your objectives for your child. You also want to name alternate parties in case your first choice is unable to act or continue to act.
Are there other concerns?
For people who have relatively little in terms of assets, and if there are no special needs for the children, then a Will, may be all that is necessary, as a basic level of planning for the child(ren). You never want to name a minor child as a direct beneficiary of an asset. I have been involved in numerous cases where a child was named as a beneficiary of life insurance, and the courts would not allow ANY access to the money for ANY reason, until the funds were turned over to the child in a lump sum, when they turned 18. This is generally not what most people want. In cases where there are significant assets, then additional planning usually makes sense. Bear in mind that you know your children better than anyone else and you probably have a good idea how they would respond to receiving a sizable inheritance.