Estate Planning involves creating documents that outline how your assets will be taken care of when you pass or in the event that you are incapacitated. When structuring your Estate Plan, it is important to consider minors. You want to ensure that your children will be taken care of both physically and financially. Below, you will find tips on how to structure guardianship so that your assets get passed to your children effectively.
There are two main types of guardians: guardian of a person and of property. A guardian of a person would physically be responsible for your children while guardian of property would handle the assets that your minor children receive. These assets include money, investments, property, and any other assets the children are entitled to. You can choose to name the same person as guardian of both, or you can divide the responsibilities.
When choosing your guardian, make sure you are aware of who can legally be a guardian in your state of residence. In Florida, you can name someone who lives in Florida or a relative. There are additional restrictions such as the guardian must be over 18 years of age, have no felony convictions, and have the mental capacity to perform their duties. If you name a guardian that does not meet these criteria, you run the risk of the courts interfering. This may lead to an unwanted person or relative being in charge of your children and their money.
For this reason, you should name backup guardians. If the guardian you choose is not able to fulfill the role, then your backup will take over. A common situation we encounter is clients with children from previous marriages or relationships. Generally, the minor children will be passed on to their surviving parent. This is problematic for some people if they had a poor relationship or if they simply do not want that person in charge of their children’s money. You can get around this rule by explicitly naming a guardian and multiple backups in your documents. The more alternative guardians you name, the less chance you have of an unwanted guardian.
Not only should you consider your children when naming a guardian, but you should also consider the guardian’s family. Consider where the guardian lives, if this means the children will be moving to another state, if they will be going to a different school, and so forth. The financial situation of the guardian’s family is another detail to consider. You want your children to be in a similar financial situation to the guardian’s family. One way to equalize this is to provide benefits to the guardian’s family. You can write this directly into your documents. Perhaps you provide the family with money for groceries each month or funds to send all of the kids to summer camp. This can help your children with adjustment and ease the burden on the guardian’s family.
Next week, we will examine the additional strategies of life insurance, retirement accounts, inheritance, and special needs trusts.
For more information on Estate Planning and Asset Protection, contact The Presser Law Firm, P.A. for a complimentary preliminary consultation.
The Presser Law Firm, P.A.