Fam with Young Children
California Estate Planning Basics for Families with Minor Children:
What Strategies Should You be Thinking About?
When it comes to estate planning, parents of young children need to ensure their wishes are carried out in case the unthinkable happens to their family. Too often, parents of young children pass away or become incapable of making their own medical or financial decisions while they are alive.
More than ever, modern family structures can take on many different forms. Each family dynamic is unique, and each comes with its own estate planning considerations. Depending on whether you’re a single parent, married or cohabiting with your children’s other parent, divorced, or are part of a blended family, your estate planning needs and concerns will vary. It’s important to plan for the worst situations, as they could happen to anyone.
Now is the time to carefully consider your estate planning options to ensure your family is taken care of in case something happens to you.
What is the Estate Planning Process?
Parents with young children have an opportunity to set their children up for a bright future through the estate planning process. By properly planning, parents can help their children continue their education, realize their goals, and live happy and successful lives. However, many families fail to take advantage of this opportunity because they don’t consider their estate planning options or don’t have the time, knowledge or resources to plan properly. This can have serious consequences for children.
Proper planning isn’t just about building wealth during your life, it’s also about providing financial security after you pass. Depending on your family’s circumstances, you may need to weigh the following estate planning considerations.
The Basics of Estate Planning For Families With MINOR Children: What Are the Major Considerations to Focus On Now?
During Life, and In Case of Incapacity:
Naming a Temporary Guardian designation for your children.
Should you become incapacitated while your children are minors, a Temporary Guardian designation will allow a short-term guardian to care for your children until a court authorization can be issued. In many circumstances, this can keep your child out of the custody of Child Protective Services. Naming a Temporary Guardian is an important step to take as soon as possible in case you become unable to care for your children–even while you’re still living.
Appointing someone to make medical and financial decisions on your behalf.
If you become incapacitated, who would you trust to make the best decisions for you, including decisions related to your finances or end-of-life care? These specially designated individuals, referred to as having been granted the “Durable Financial Power of Attorney” or “Healthcare Power of Attorney” over your affairs, may not be the same individuals as the “default” designees according to California law. You should determine appropriate agents yourself with an experienced California estate planning attorney.
Developing a plan for ensuring your children's financial and emotional needs are met.
Many parents opt to establish trusts or utilize other estate planning tools to help provide for and fund milestones in the lives of their children. Your estate plan can state how much money should be spent on the children's education, as well as what kind of upbringing they should have. You can also purchase or reevaluate your current life insurance to ensure your family's financial security and children's educational needs are met in case of your untimely death.
Utilizing asset protection strategies for any business and property interests you own.
If you’re a business owner, ensure your personal assets are protected from any business liabilities, such as lawsuits and other claims. Having a business succession plan in place, even in case of emergencies, is also key to ensuring the business continues to run and provide for your family. This is critical to securing that financial future you’re so carefully planning for your family.
Reevaluating the plan you have now.
Estate planning tools may be more flexible than you think. Certain estate planning tools allow the creator to change their mind about the distribution of their assets while they are still alive, and many trusts allow for specific limitations and/or contingencies to help ensure your wishes are properly carried out according to the timeline you’ve articulated.
After Death:
Don’t let the “default” settings of the California Probate Code dictate what will happen to your family.
If you live in California and pass away without establishing an estate plan, your assets will be distributed based on a set of default rules housed in the California Probate Code. Many families, particularly blended families, find that these default rules do not match up with their actual desires for asset distribution after a parent has passed. If you have children and have remarried, you may desire for a greater share than what is “standard” to be directed toward your children, whether they are adults or minors. Working with an estate planning attorney is critical to ensuring your children are taken care of the way you’d hoped they would be.
Making sure you have a say in who your child grows up with and who will manage their inheritance.
You can also name a Permanent Guardian for children. If approved by the courts, this individual will be responsible for raising your children and making decisions on their behalf. It's important to be selective and name someone who shares similar values and lifestyle to yours. Oftentimes, but not always, the Permanent Guardian is also the Trustee, or individual who manages the Trust assets in your children’s best interest.
Providing continuous care for children with special needs.
If one or more of your children has special needs, your estate planning considerations and concerns may be heightened. A Special Needs Trust can help direct the financial resources necessary to provide your child with the quality of life they had while you were living, while preserving their government benefits.
Watch our short video on best practices for selecting a Guardian here.
Naming a Permanent Guardian guarantees you have a say in who will raise your children and what values they will grow up with. This strategy can often be accomplished through inclusion in a parent’s Last Will and Testament.
Where California Families with Children Can Turn for Help With Their Estate Planning Needs:
At Legacy APC, our team of experienced California estate planning professionals can help you make informed decisions about protecting your family’s future. We know that each family’s dynamic is unique, and so are the estate planning considerations that will be important to them. If you’re considering establishing a Will, Trust, or exploring other options within the estate planning process, reach out to us today at (619) 696-0778 to schedule your free consultation.
