You plan for their meals, their schooling, their future, and what you are going to do today - but as much as we hope that this never happens, have you planned for what happens if you’re not there?
Estate planning may not be the first thing on your mind between diaper changes and recording the first time your baby rolls over, but it’s one of the most important steps you can take to protect your children and give yourself peace of mind. Making sure your estate plan is up to date is essential to ensuring your kids are cared for, no matter what happens.
Why Estate Planning Is Crucial for Parents
Many people assume that if something happens to them, their children will automatically be cared for by their closest relatives. But in reality, without a thorough estate plan, there will be more that a court will need to determine. When you plan does not encompass caring for your minor children as well as property needs and management on behalf of minor children, Surrogate’s Court will need to fill in the gaps and have more of a role in these matters. There can be any number of issues that present themselves at this time, including fighting between individuals in regard to who should care for your children and the need for assets to be held jointly with Surrogate’s Court. Creating a solid, well-thought out estate plan that encompasses caring for your children, both with their personal needs and the property management needs, gives you greater control for the future of your children. This kind of planning is critical. According to the
American Bar Association, one of the most common mistakes parents make is assuming that estate planning is only for the wealthy or elderly. In reality, having a plan in place is essential for anyone with dependents, ensuring that minor children are provided for if something unexpected happens. A proper estate plan ensures that:
- Your children’s guardian(s) are who you nominate, not just who the court determines without your input.
- Your assets are managed wisely on their behalf - and focus on benefitting the kids and family you leave behind and want to support.
- Makes sure children are financially supported without legal complications.
- Ensures your wishes are honored without unnecessary (and often costly) delays.
The Key Estate Planning Documents Every Parent Needs
1. Naming a Legal Guardian in Standby Guardian Documents and in Your Will
If something happens to both parents, who would you want to raise your children? This is one of the most difficult but crucial decisions you’ll make in your estate plan. If you don’t nominate a guardian (and alternates), the court will step in (without any input from you) and determine who will care for them. While sometimes this is who you want, sometimes it isn’t… And when the stakes are as high as the future of your kids, you don’t just want to leave those things to chance. You want to think through living arrangements, schooling, medical needs, and so on. You can nominate a guardian or co-guardians and have alternates lined up as well. You can work through appropriate provisions that work with your overall estate plan.
Tips on Thoughtfully Choosing a Guardian:
- Who shares your values and parenting style?
- Who has financial stability, and is in a location where you would want your kids to be raised?
- Who would be emotionally prepared for the responsibility of raising your kids?
- Have you talked to these individuals and have they acknowledged that they would be willing to do this for you?
- Want to grant godparents guardianship? They likely will not automatically be chosen… Therefore you MUST name them in your legal documents!
2. Setting Up a Trust for Your Child’s Future
Setting up a trust can allow you to set assets and funds aside for your child’s care, education, & future while ensuring assets are managed responsibly. Without a trust, any inheritance may go directly to your child at age 18 - whether they’re ready to handle it or not. Worse, if you haven’t updated your legal documents, assets could go to an estranged spouse or other relative (as discussed in our last
blog post!) that do not align with your wishes. According to
Lawyers.com, trusts are one of the most effective tools for managing an inheritance responsibly (they have some great info on the topic as well!) A well-structured trust can prevent minors from receiving a large sum of money all at once while allowing a trustee to distribute funds for their education, healthcare, and other needs. There are two ways to think of setting up a trust: a lifetime trust, and a trust through your will. Without either, a guardian of property for your children will need to be appointed by Surrogate’s Court and then assets are held jointly with Surrogate’s Court until a child is age eighteen. This is usually not what parents want for their children. A lifetime trust provides more control in various ways, including avoiding probate for assets held in trust. Where minors are to benefit from an estate, there are others who can be involved in the entire estate, from estranged spouses or blended family concerns, creditor issues, court-appointed attorneys who act on behalf of minor children, guardianship of property appointments, delays in probate and so on.
Why Consider a Trust?
- You can control when and how your child receives their inheritance.
- You can name a trustee (a responsible person or professional) to manage the assets until your child reaches a responsible age or in terms you find acceptable.
- A lifetime trusts avoids probate, which can be costly, time-consuming, and cause delays in funds that may be needed to handle expenses for the child.
Here’s an Example:
If you leave $200,000 to your 10-year-old in your will without a trust, Surrogate’s Court will appoint a guardian of property to manage those funds jointly with the Court until they turn 18. The child will then be given all of those funds that remain at one time when they turn 18… which we know may not be used with their best interest. Of course, many factors can come into play depending on the child’s situation. Yet, the maturity of the child and the ability of him/her to handle a windfall can be largely unknown. With a trust, you can specify that the funds be managed and distributed in the trustee’s discretion or even in a gradual manner depending on needs, age, or other guardrails (e.g., for age, this could be some at 25, more at 30, etc.), ensuring they don’t blow through their inheritance too soon and learn to manage it responsibly.
3. A Power of Attorney and Health Care Proxy/Living Will
Most parents think estate planning is only about what happens when they pass away, but planning for incapacity is just as important. If you become unable to make decisions for yourself, who will manage your finances and make medical decisions for yours and your family’s behalf?
Power of Attorney: Names someone to handle financial matters
Health Care Proxy: Names someone to make medical decisions for you
(As well, as mentioned above, there is the Standby Guardian
which names someone to handle decisions regarding your minor child if you’re unable to in certain circumstances).
Example: If you were in an accident and unable to access your accounts, pay your bills, or make medical choices, who would be able to take care of this for you? If you were incapacitated and your child had to go to the emergency room, who would be able to make medical decisions on their behalf? Having these documents in place ensures that someone you trust can step in without the court having to get involved.
What Happens If You Don’t Have an Estate Plan?
According to the
New York State Unified Court System, if parents pass away without a will, the court appoints a guardian based on the child's best interests. This process can be time-consuming, costly, and may not reflect the parents' true wishes, underscoring the importance of formal estate planning for parents of young children. If you pass away in Amherst, Williamsville, or anywhere in New York State without an estate plan, your estate will go through New York’s intestacy laws, which means:
- The court will decide who has the right to make decisions for your children.
- The court determines who manages your child’s inheritance.
- Your assets may be tied up in probate, causing delays and extra expenses.
- Your child will receive their entire inheritance at 18, with no restrictions.
Estate planning services help you take control over these decisions now, rather than leaving them up to a judge who doesn’t know your family’s needs or your wants for your children.
Getting Started: Estate Planning for Parents in Western New York
The good news? Estate planning doesn’t have to be complicated or stressful. At Ruth P. George Law PLLC, we concentrate in estate planning services for families in Buffalo, and throughout Western New York. We know how important the details are when it comes to estate planning with kids involved, and will help you create a comprehensive plan to protect your children and ensure your wishes are carried out.
Not sure where to start? Visit our
Estate Planning Services page or
schedule a consultation
today! Let’s create a plan that gives you peace of mind - so you can focus on what matters most: your family.
