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Planning for Minor Children

Estate Planning for Minor Children: What You Need To Know

Many parents plan for their family to be protected and cared for in the event of their death. They especially plan to cover any minor children. Estate planning is necessary to ensure that your loved ones are financially and legally protected when you cannot be there for them.

Estate planning when minor children are involved requires special consideration. Let us review some essential legal information for California residents before looking at what needs to be covered and included in estate planning.

Table of Contents

California Law and Your Estate

If you have no estate plan in place when you die, the laws of the state you live in will dictate how your estate is handled, including who receives your assets and who raises your children. Therefore, doing the research and consulting with an attorney with experience in estate planning and the associated legal issues is essential.

How Will My Assets Be Used?

Under California law, if you have no estate plan in place, your assets will go to whomever the law recognizes as your heirs. Unfortunately, these may not be the people you would want inheriting from you. 

Also, if you have no plan, your spouse will inherit any assets classified as community property, but if you have separate property, a portion of this goes to your children.  If your children are minors, their share of the inheritance will move into a trust that the court supervises. This could severely limit your spouse’s ability to access the money and care for the family in your absence. It can also be harmful if your minor child or children have special needs or if an illness or other emergency requires access to those funds and your spouse cannot use them.

The assets in this trust will be fully distributed to your child when they reach the age of majority, which in California is eighteen years of age. Thus, even if the child cannot handle the money prudently or maturely, they could have control of half the assets that you leave behind.

Who Will Raise My Children?

If your spouse is the legal parent of your children, then this question rarely becomes an issue. However, if there is no surviving parent,it falls to the courts to select a legal guardian for the child or children.

Guardianship may also become an issue if family or friends disagree as to who should raise the child or children. In these cases, the courts must also step in. Unfortunately, it can take a long time to completely resolve disputes, costing the estate a great deal of money and causing emotional harm to everyone involved, especially the young children.

Protecting and designating how to handle your money and choosing how your children will be raised and by whom are the most important reasons to solidify an estate plan as soon as possible.

Essentials of Estate Planning for Minor Children

When estate planning for minor children, you will want some essential elements, including:

  • A will

  • Incapacity documents

  • Life insurance provisions

  • Trusts for minor children

  • Choosing guardians for your minor children

Write a Legal Will

The first element of your estate plan is called your Last Will and Testament, more simply known as your “will.” When you write a legal will, you can designate who will control your property following your death. It may include your home and its contents, as well as any other assets or property in your name. You may also outline conditions for the inheritance of property or items.

You can also stipulate in a will whom you want to look after your children in the event of your death. Though having separate guardianship papers in place is highly recommended, specifying in the will whom you want to assume guardianship of your children in the event of your incapacitation or death shows your intention. In addition, it makes it less likely that there will be legal challenges since the courts will typically honor the wishes of the parents as expressed in the will, unless there are good reasons not to.

Name short term emergency guardians

Naming long term guardians in your will is not enough if you have minor children.  It is certainly important to specify who will raise your children if you are not able to.  However, the short-term emergency situation must also be accounted for.

This is the nightmare scenario that none of us who have minor children ever wants to think about.  This is the situation where the parents are out for dinner and, for whatever reason, do not make it home.  The kids are at home with a babysitter.  The police will show up at the house at some point, but will not leave the children with a babysitter who has no authority to stay with those children.  The police will have no choice but to arrange for the children to be taken into the care of Child Protective Services temporarily while they work out who the long term guardians should be.

This is a significant gap in the planning that is traditionally done for families with minor children.  To address this, we help you to name short term emergency guardians who live locally.  We provide legal documents to those short term guardians that will demonstrate to the police or CPS that they have the authority to stay with the children until the long term guardians can be identified.  This is a critical piece of the planning that we do for families with minor children.

Buy Life Insurance

A term life insurance policy is a practical way to help protect your family, providing much-needed funds in the event of your death. However, in California, a minor child will not receive the money as a life insurance beneficiary as long as they are a minor, even if you have them designated as the beneficiary.

The insurance company will pay out the full payment. Still, it will be deposited into a blocked account under the supervision of the local Superior Court in the area your minor child will be living. A probate judge will supervise this account.

This is why it is often critically important to establish a revocable living trust.  Naming the living trust as beneficiary of the life insurance instead of your minor children avoids the need for court supervision until the child turns 18, and allows you to specify how and when the insurance proceeds should be used for the benefit of the child.

Trusts for Minor Children

As mentioned above, it is best practice that your estate planning for your minor children includes a trust. A trust will safeguard whatever inheritance your children will get from you, allowing you to stipulate how much of the money is for them and how they can use it. It also determines what age they can receive it personally and how much they will receive and spend.

A trust will allow you to designate specific amounts for education or stipulate that they do not receive their entire inheritance until they are legally adults. A trust for your minor children can also protect their legacy from any future creditors, lawsuits, bankruptcy or divorce, provided that the trust is set up appropriately.  

You can also establish trust funds to provide for your children’s support. In that case, a trustee can manage the estate. This person may be separate from the guardian.

Choose Guardians for Your Minor Children – both short term and long term

Of all the elements of an estate plan, this is the most important when you have minor children. Though the courts will appoint someone in the family or close to the children as their caretaker and guardian, it may not be the person you want. A close family friend may have a better relationship with your children than a long-distance family member, and they may be a better choice.

Using your will and estate planning to nominate whom you want to raise your children is very important. Be sure to gain consent from the person you select and make sure your children understand who will care for them if something happens to you.

Learn More About Estate Planning For Minor Children

Estate planning for your family, especially for your minor children, may not be a topic you look forward to discussing. Still, the consequences of not planning for the future can be financially and emotionally hard on your family.

Careful estate planning includes all the proper health and financial documents, as well as paperwork to ensure the protection and well-being of your minor children. It is the best way to guarantee that your wishes for your family come to fruition and that they are protected.

At Weiner Law, we focus on estate planning services, including creating wills and trusts that protect your family and your assets. Located in San Diego, CA, we are ready to help you achieve your goals and fulfill your estate wishes.

If you are ready to get started right now, you can also schedule a Deep-dive Planning Session, where we can discuss all of your wishes and concerns regarding your estate and your minor children and answer any questions you may have.

If you are interested in more information or want to schedule a complimentary consultation, you can write to us or call us at (858)-252-4768.

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