Estate planning is an essential process to plan for your future, and it is even more important if you have minor children to ensure that their wellbeing and financial security is accounted for.
Guardians
Your first step when estate planning with minor children is to choose a legal guardian to become your children’s primary caretaker if you die or become incapacitated before they turn 18. This person may be a close family member, such as a grandparent, aunt or uncle, or even an older sibling, but could also be a close friend, step-parent, or other person you entrust to care for your child. The guardian takes physical custody of the child, is responsible for their health, safety, and makes legal decisions on their behalf, including where they go to school. It is important to consider potential guardians’ values, age, stability, and their geographic location. If you designate a married couple to serve as your children’s guardians then it is important to consider what to do in the case that they divorce. It is also important to establish back-up guardians in the case that your primary selection turns down the role or is unable to fulfill their duties.
Choosing a guardian is an essential component of a complete estate plan for minor children and is a big responsibility. It is important to discuss with your potential guardian choices if they would be willing and able to be a guardian in the scenario that you can no longer take care of your children. Guardians are designated in your will. If you do not designate a guardian for your children, then the court will designate one for you in the probate process.
Financial Guardian
When creating a will and an estate plan, you also have the chance to designate a financial guardian for your children. The financial guardian may or may not be the same person as the physical guardian for your children. If you do not designate a guardian, the court will choose one person to be both the financial guardian and physical guardian of your minor children. The financial guardian manages and has control over any money or assets left to the minor until they turn 18 and can utilize them for the care of the minor. This ensures that the minor is properly cared for but the position may also be abused and the minor may have a difficult time proving the financial guardian’s abuse once they turn 18.
Trusts
If a child is a minor, under the age of 18 in Wisconsin, then they cannot inherit money from their parents outright. In the event that both parents pass before the child turns 18, it is important to establish a trust that the children can access at an age determined by the parents (above the age of 18). For example, the trust could distribute the funds after the child graduates from college or is in their late 20s. Trusts allow for many options, such as a Child’s Trust or Special Needs Trust, which can be created for minor children and can be used to distribute money for the children for healthcare, education, maintenance, and support. Trusts can also hold more than just money. You may use different types of trusts to hold real estate, stocks, money, or other inheritances for your children. Read our blog post on how to set up a trust in 5 steps for more information.
UTMA and UGMA Inheritance
UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gift to Minors Act) accounts use 21 years of age as the benchmark for when their funds should be released instead of 18. You can also list a different age as long it is over the age of 18 under this act.
Contact the Wisconsin estate planning lawyers at Konstantakis Law Office
To ensure that your children’s safety, wellbeing, and financial security is accounted for, it is essential to hire an experienced estate planning lawyer in Wisconsin. Attorney Konstantakis will advise you on the documents to include in your estate plan and what provisions may be necessary in your will and trust.
