5 Essential Estate Planning Tips for Parents With Minor Children

Estate planning holds particular significance for parents with children under the age of 18. While you may be focused on your children’s growth and environment today, it is crucial to establish a comprehensive plan for their future. This preparation goes beyond merely securing their financial stability; it’s also about ensuring their continued care and protection in the face of unforeseen circumstances. Here, we share five indispensable tips that we urge families with children to consider when creating their estate plan.

Avoid Costly Conservatorships

If you pass away without a will and your child inherits more than $5,000 as a result, those funds will need to be held in a conservatorship. A conservator, or guardian of the property, handles financial matters, property management, paperwork, legal filings, and more for their ward. Navigating this process requires filing inventories, submitting reports, and seeking court approval for significant decisions or expenses. This can all be extremely time-consuming and expensive. The lack of flexibility can often impede timely decision-making when urgent matters arise. Avoid the necessity of court scrutiny by creating an estate plan to address your children’s financial future. 

Designate Guardians

One of the most critical decisions parents can make is selecting a guardian for their minor children. Guardians are those who will care for your children and make parenting decisions for them if you are incapacitated or pass away. When designating legal guardians for your children after your passing, New Jersey courts will always prioritize “the best interests of the child.” Notably, New Jersey courts strongly consider the preferences stated in the parents’ wills when making guardianship determinations. Judges are generally inclined to honor the wishes of the deceased parents whenever feasible. This is especially true when your chosen guardians are both qualified and capable.

Plan For Incapacity

Alongside naming guardians in your will, New Jersey parents have the option to execute standby guardianship designations. This powerful tool enables you to appoint someone to step in as guardian for a temporary period if you become sick, incapacitated, or otherwise unable to care for your children. By doing so, you grant the standby guardian the authority to promptly assume care of the minors without the need for court intervention. Their authority is suspended once you are able to resume parenting duties. Standby guardianship ensures someone you trust can immediately provide care if an emergency situation arises. It provides important protection for your children if you suddenly become unable to meet their needs.

Create A Trust

As we have discussed at length on this blog, trusts provide a superior level of control and flexibility when planning for your children’s future. For minor children, trusts are especially important, as they generally provide instructions for how your children’s inheritance is to be managed. When you create a trust, you appoint a trustee to hold and manage assets on behalf of your beneficiaries until they reach a certain age of your choosing. With a thoughtfully crafted trust, you can provide financial support for your children’s needs such as their education, housing, healthcare, and general welfare. Additionally, trusts also allow you to distribute lump sums to your beneficiaries at specific ages and impose conditions on distributions. Moreover, a trust can protect your children’s inheritance from potential creditors, as a trustee is bound by your instructions and is generally cannot be compelled to distribute funds by third parties. As experienced estate planning attorneys, we can guide you through the process of setting up a trust that aligns with your family’s unique needs and ensures your children’s financial well-being.

Review and Update Plans Regularly

Time flies, and children grow up quickly. Each year brings new developments, challenges, and prompts to review your plans for the future. As laws, finances, and family structures evolve, it is essential to revisit your estate plan and make any necessary adjustments. Take the time to review your guardianship nominations, trustee appointments, and distribution instructions to ensure they still align with your wishes and the best interests of your children. As your children age, you learn more about them. As you learn more about your children, you may decide to modify the ages or conditions for their inheritance. For instance, may choose to remove a college graduation requirement for an inheritance if you believe your child might prefer to attend a trade school instead. By consulting an experienced estate planning attorney, you can proactively adapt your plan to address new challenges and opportunities.

Summary

If you have minor children, you have enough to think about without worrying about their future well-being. Thankfully, planning for your children’s future doesn’t need to be an overwhelming task. By implementing a well-crafted estate plan, you can ensure that your children have the proper guardians and financial support to grow and thrive. As dedicated estate planning attorneys, we are here to support and guide you through the process of family planning that provides security and peace of mind for you and your loved ones. Allow us to help you embrace the future with confidence, knowing that your children’s futures are safeguarded and their best interests are protected.