Starting a family and having children is a joyful time for everyone, but is also a period full of uncertainties, questions, and new responsibilities. There are some questions in our lives most of us want to avoid or delay but preparing for the future and securing our children’s or grandchildren’s future should not be one of them. Although we may feel uncomfortable thinking about our own passing, we must make sure in case anything happens to us, our children or grandchildren are well taken care of and still have the future we planned for them.
In this article we are going to talk about the practical solutions that can help you to take care of your children or grandchildren’s future by providing them with support even when you may no longer be with them, so they could have the secure future you would want for them.
The loss of a parent is always a painful experience, but it is particularly difficult at a young age. In addition to the experiencing immense grief, the two areas that have the most considerable influence on the entire future of children are the child custody rights and management of financial affairs.
If only one parent dies, the question of custody is more straightforward; and in most cases, the remaining biological parent gets full custody of the children. In some unique circumstances and in the context of a very complicated and lengthy procedure, the court may deviate from this practice, but this is very rare. In the event of the death of both biological parents and in the absence of a will, the court takes over and most probably awards custody to those who are most closely related to the child and have a strong, pre-existing, and proven relationship with the child (grandparents, aunts, uncles, or cousins). In case there is no living or suitable family member, family friends can come into the picture.
Being prepared is essential to avoid any unwanted consequences and ensure that your children are well taken care of. Having a will and naming those you trust the most as legal guardians is the best way to protect your children, should the worst happen.
In addition to the question of custody, inheritance, management, and future usage of assets form another important question that can define the future of your children. It is important to know that children under the age of 18 cannot get access to your assets, so you need to make sure that your assets are well managed and taken care of to best serve the needs of your children or grandchildren in the event of your death.
In the absence of a will or an estate plan, for children under eighteen, the court will appoint a Conservator, who, under tight control, can supervise the use of funds and is allowed to manage money. This is a complex procedure and access to the assets – even if it is needed for the children – is difficult. Furthermore, you have no real influence on how the money is managed and spent when your children get access to it. Most children are not yet mature or responsible enough to oversee their finances when they reach the age at which they can get access to the wealth inherited from their parents or grandparents. In this case, the risk of squandering the assets is extremely high.
Creating a will or a full estate plan is an important step for every parent to secure the future of their children or grandchildren. Consequently, they must do this as early as possible and should not forget to review and modify it as the years pass, so it is always up to date. We cannot emphasize enough that the best way to proceed is to involve a professional, taking the necessary precautions and ensuring that your will or estate plan complies with all legal requirements, leaving no room for possible challenges or attacks.
If you have accumulated greater wealth over the years, a will alone might not be the best route to take. Creating a testamentary trust for your children (one that is set out in your last will and commences only after you have passed away) can provide the necessary safety and flexibility for them, as well as give you greater control over how they will be taken care of. This way, not only can the state-appointed guardianship and conservatorship be avoided, but you can also have peace of mind knowing your children are taken care of as you find it best by those you trust the most, and your estate is managed for the benefit of your children.
The key benefits of a testamentary trust for children are:
- In an extremely difficult period, it can create a clear situation for the children and those who take care of them
- The children will be taken care of according to the parents’ wishes
- The children’s inheritance will be in the hands of a qualified trustee appointed by you (and not a third person), so it will be managed to serve those goals you set in the trust documents
- The children and the guardian can have easier access to the assets to cover type of expenses parents have agreed to in the trust deed
- Parents can set up separate shares for their children, so everyone’s special needs are met
- Parents can decide when and how the children will get money/assets from the trust (you may even consider a lifetime trust to protect children from future creditors or other 3rd parties)
- Parents can protect a child with problems or special needs with a lifetime trust
- Parents can decide what should happen to the money in case the child dies
Finding the optimal solution that not only secures your children’s future, but also takes your current situation and future plans into consideration, is crucial. Contact Primus Wealth and our professionals can guide you through the entire process and assist you in setting up a plan that gives you peace of mind.
