In a previous blog post, I highlighted the property distribution problems of dying without a will. Besides not deciding who receives your property, dying “intestate” causes other serious problems.
Children cannot inherit property or money. Plus, they are not considered capable of taking care of themselves. So, your children will be completely unprotected if you die without a will before they reach 18.
In this situation, the only solution is a guardianship. There are two types of guardianships: a guardian of the person (someone who cares for the children’s day-to-day needs) and a guardian of the estate (someone who takes care of the children’s finances). There is also a “general guardian” option that combines both of these.
To take care of your children, someone will have to petition the court to be named as the guardian. The guardianship process can be expensive, time-consuming, and hasslesome for your loved ones. Even worse, without your input and guidance, the court might not appoint the best person for this important role.
So, if you have children, you need to create an estate plan to provide for them. You can nominate a guardian in your will to take care of your children in your place. This makes it much simpler for your trusted nominee to obtain a guardianship of the person over your children. You can also set up a trust to provide for your children. A trust allows someone to take care of the assets you leave your children until they reach a certain age (often 18, 21, or 25). Then, they receive the property outright when they reach the selected age. This avoids the necessity for a guardianship of the estate. It also allows you to leave instructions and guidelines about how the Trustee should provide for your children, if he has to step into your shoes.
Don’t leave the fate of your children up to the court system. Create an estate plan to protect and provide for them.