Your will is often the starting point of an estate plan. Depending on where you are in life, your will can address who will receive the property in your estate, who will care for your minor children, and who should be responsible for administering your estate – that is collecting your assets, paying your debts and expenses, and then distributing the remaining assets to your named beneficiaries.
Your position in life will determine the type of will you need, as well as the most important parts of the will. Every will should contain the provisions directing how and to whom your estate is to be distributed. For most parents with minor children, the two most important provisions in a will are 1) who will take care of my children and 2) how will my children’s inheritance be managed so it can best benefit my children.
The person you name in your will to care for your minor children is called the ‘guardian of the person’. A ‘guardian of the person’ is charged with caring for and raising your minor children – they will raise your children, provide a place to live, and provide necessaries. Naming a guardian of the person for a minor child in your will is not binding on the Court, although your choice is considered paramount in the Court’s decision. The Court is always charged with doing what is in ‘the best interest of the child’; however, unless your named guardian has serious and compelling flaws that would make him or her unfit to care for a minor child, your choice of guardian will be given strong consideration.
Maybe not as important as the choice for raising the minor child, but still very important, is the choice of who will manage an estate for the benefit of the minor child. Absent any specific language, a gift in a will to a minor child will most normally result in the appointment of a ‘guardian of the estate’. The ‘guardian of the estate’ is appointed by the Court, through a guardianship proceeding. Once a guardian of the estate is appointed, that person is charged with using the assets in his or her control only for the benefit of the minor child, although expenses associated with the guardianship process can be charged against those assets. A guardian of the estate will also be required to post a bond to the Court, like an insurance policy, to protect the minor from waste or mismanagement (or worse) of the assets. Annual accountings, documentation of expenses (and income), yearly reconciliations and Court oversight are all required. Moreover, the minor child will be entitled to his or her share of the assets, without any further supervision, on his or her 18th birthday. This is not a ‘bad’ option, but estate planning can provide a better solution.
The better solution is in the form of a trust arrangement, whether testamentary or inter vivos. A testamentary trust is simply a trust included within your will. A testamentary trust only comes into existence when the will is administered, i.e. at your death. An inter vivos trust, or living trust, is actually created and in existence while you are alive. In either case, the person you select to administer, manage and carry-out the trust’s terms is called the Trustee. With a trust arrangement in place, management of your assets for the benefit of minor children is handled by the Trustee. While court supervision is typically not required, Trustees must adhere to certain statutory guidelines applicable to ‘fiduciaries’. Fiduciaries are charged with acting in ways not for their own benefit, but instead for the benefit of someone else. Thus a trustee is charged with managing and handling trust assets not for his or her own benefit, but instead for the benefit of named beneficiaries, i.e. the minor children. Moreover, trustees are guided by the terms of the trust agreement, not the Court or the General Statutes. Thus, trust beneficiaries, in most instances, are not required to receive their inheritances at statutory ages, but rather at the ages you choose. Even if your children are no longer minors, a trust arrangement can be beneficial. Trust agreements can provide protection for adult children who may not be as financially savvy as expected, have creditor issues, or who have made poor marriage choices.
DISCLAIMER: THE INFORMATION PROVIDED ON THIS WEBSITE WAS PREPARED BY SODOMA LAW, P.C. AND IS INTENDED FOR INFORMATIONAL PURPOSES ONLY AND NOT, IN ANY WAY, CONSIDERED LEGAL ADVICE.