Wills with Minor Children
Posted on September 16, 2008 by Nancy Liu | Category: Wills & Estate Planning
What Should Be Included in a Will When You Have Minor Children?
In previous articles, we have discussed the importance of a will. A will is not only a document stating who will inherit your assets, it is also the basic document that will be relied on by the court regarding the care of your children and their inherited assets — especially for your minors children or children with special needs. However, people often ignore this function of a will.
1. Who will take care of my children?
If you have minor children, don’t forget to appoint a guardian to care for them after your death. The guardian will be responsible for providing clothing, food, housing, transportation, and education for your children and to make decisions on their behalf. When choosing whom to entrust with this role, you should consider whether this person has the same values as yours. The candidate’s family, health, geographical location, financial condition, asset- management and parenting skills should also be considered. Generally, the guardian has two major responsibilities: to raise the children and to manage the assets you left for them.
If you should die without leaving a will or without specifying the guardianship in the will, the court will appoint a guardian for your children. The court-appointed guardian may have very different values than you do. If so, you won’t have any control on how your children will be raised.
Normally after the court appoints a guardian, the court will require the guardian to obtain a bond to ensure that the guardian will perform his obligation properly. The primary purpose of the bond is to prevent the guardian from misusing the children’s assets. The guardian also must report to the court the property’s income and expenditures, management and investment; in addition, he must report on taxes in connection with the children and the property. Most importantly, the guardian must raise the children and help them with education or other daily events.
To protect the children, the court always issues detailed requirement for guardians. If you don’t specify how the guardian will perform his duties, he will bear an unnecessary burden in trying to raise your children.
2. Who will manage the assets I left for my children?
According to U.S. law, minors cannot directly possess any asset. If you leave any assets to your minor child and do not appoint an adult to help her manage them, the court will appoint someone for her and keep these assets in conservatorship. This person is called a conservator. The conservator manages and invests the assets for your minor child until she is 18 years old. The problem with a court-appointed conservator is that any use of the minor’s assets must be approved by court — a time -consuming and costly process.
How can you avoid this problem? In your will, you should designate a trustee to manage the assets of your minors so that the assets won’t be left in the hands of the court. The trustee can be the same person as the guardian of the minor, or a different person. When you decide your minor’s trustee, his values and his financial- investment and management skills should be a part of your consideration.
3. When can my children use the property I left?
Generally, your children will not be able to use the assets you left without court approval until they are 18 years old, which means that they cannot freely access these assets. But once they turn 18 years old, the court will allow them to fully access these assets in the absence of contrary provisions in your will. Can an 18-year-old child properly handle a large sum of assets? Most people will say that it probably will be more harmful than helpful to an immature child if he is suddenly given large sum of money.
How could you prevent this risky windfall to a minor child? In your will, you can place the assets in a trust and control the exact time when the child can access them. . For example, you can specify in your will that the assets will not be distributed to your children until they are 25 or 30 years old, or gradually distribute the assets in installments when the children reach a certain age.
As a parent of minors, you will have to consider all these issues when you draft your will. If you do not have a will or the will does not cover these issues, the court will then decide for you. The court’s decision may not be the best one, given your family’s needs or financial situation. Are you willing to put these important issues in the hands of a court that has no prior knowledge of you or your family?
This article is only for your reference. Please do not apply mechanically to any exact cases. You are welcome to consult our attorneys at Liu & Associates, P.C. For contact information, please click here.