Estate Planning To Protect Minor Children in Port St. Lucie
If you have minor children, it is essential to have an estate plan that protects them if you pass away. In the event you are not around to raise your children until adulthood, you need a plan that includes a guardian for them and considerations for their finances.
Naming a Personal Guardian in your Estate Plan
In Florida, the proper way to nominate a guardian for your minor children is in your Last Will and Testament. This should be the person who you would prefer to raise your child if you and the child’s other parent are no longer here. In most cases if there are two parents, each will have their own will in which they name each other as guardian. Each parent includes a back up guardian or guardians, in the event both parents are deceased. These successor guardians should be listed the same way in both wills.
Factors to consider when choosing a guardian for your child
Selecting the ideal personal guardian for your child involves considering various factors. These include assessing the individual’s values, temperament, and ability to manage additional responsibilities if they have their own children. If your child is of school age, proximity to your community might be a preference for stability. While grandparents are often considered, their physical capability to care for very young children should be evaluated. Regardless of your choice in your estate plan, engaging in a serious discussion with the potential nominee is crucial to ensure their willingness to undertake such a significant responsibility. Keep in mind that, upon your passing, the court will ultimately determine the most suitable guardian, but generally, your specified choice in the Last Will and Testament prevails unless there are compelling reasons to reconsider.
Creating a Trust to hold your minor child’s funds
While your current assets may not be extensive, it’s crucial to plan for the future, particularly concerning life insurance proceeds and potential lawsuit settlements for your estate. Your children will likely also receive social security benefits as minors with deceased parents. Designating these funds to be channeled into a trust for the benefit of your child is advisable. Your will should stipulate the establishment of a testamentary trust after you die, with the appointment of a trustee responsible for managing the funds on behalf of your child. While this “guardian of the money” can be the same person as your child’s personal guardian, it is not mandatory. Many families choose to have a separate guardian of the child’s person (physical custody) and a separate trustee to act as a guardian of the child’s finances. Backup trustees should also be named, and a provision can be included instructing the trustee to release funds gradually once the child reaches the age of majority. Without such a trust, your child would receive a lump sum at the age of majority, potentially leading to imprudent decisions, such as neglecting the pursuit of post-high school education.
A Common Pot Trust provides for your individuals children’s needs
Addressing the unpredictable financial needs of your children is essential, considering the varying requirements they may have in the future. A prudent approach is to incorporate into your estate plan a Common Pot Trust to manage funds for all your children. This can be done in both will-based and trust-based planning. Instead of mandating an equal division among them, this trust grants the trustee the discretion to allocate money based on individual needs. The provisions typically outline that the trust dissolves when the youngest child reaches a specified age, allowing for equal distribution of funds among all your children, although not necessarily all at once. Both parents should specify that the estate passes to the Common Pot Trust if both parents are deceased, following an initial bequest to each other.
Review your beneficiary designations
It is best to avoid designating your child as the beneficiary of your assets if they are minors. If they are minors at the time of your passing, in such cases, the court will establish a guardianship and appoint someone to oversee the inherited funds until your child reaches the age of majority. Releasing a lump sum of money to a young person might be unwise due to potential lack of maturity. Instead, it is advisable to stipulate in your last will and testament that any funds your child inherits through a beneficiary designation should be directed to the trust you’ve established for their benefit.
