As a parent you naturally care for your child(ren)’s basic needs: feeding, bathing, providing shelter and clothing, and comforting through scraped knees and bad days. What may not come as naturally or as easily, but is just as important, is protecting your child(ren) in the event the unthinkable happens, and your children are left without either parent to care for them.
While statistically, this is unlikely to happen, the reality is it does happen. Without the proper planning the results are often far from what you would want for your children should they end up in such a vulnerable position. These results can include: (1) a judge who doesn’t know you or your children deciding who raises your children; (2) a long drawn out custody battle ensuing between your remaining friends and family; (3) the court and statutes controlling your children’s finances until your child(ren) is 18; (4) your 18-year-old(s) receiving all of the money remaining in your estate in one lump sum; (5) the accumulation of expenses related to the oversight and reporting requirements imposed for court-supervision of your children’s finances.
Under Minnesota law, if both parents die leaving minor children and without appointing a legal guardian, a guardian will be appointed by the court. This person will be granted the authority to make decisions on behalf of your child(ren) about such things as where to live, medical decisions, training and education, etc. The Court will also appoint a conservator to manage your assets on behalf of your child(ren). This person will be granted power to enter into contracts, pay bills, invest assets, and perform other financial functions for your child(ren). Court costs and any attorneys’ fees, as well as the ongoing conservator fees will all be paid from your estate. These appointments will expire when your child(ren) reach 18 and any remaining amount left in your estate will be distributed to your child in a lump sum at this time.
Finding time to take care of things beyond the day-to-day activities of life is tough for any parent. However, taking the time to create an estate plan is one of the most important things parents can do for their children. Planning will ensure your children will be cared for and decisions will be made for them by people you choose and trust and the assets your children inherit will be used for their benefit and managed responsibly until they are able to handle their own finances.
In later articles, we will discuss the various estate planning tools that can be used to protect your children’s interests.