MARRIED WITH MINOR CHILDREN
Planning for the Future
A married couple with minor children have reached the third stage of estate planning. Because a sudden illness and/or passing may incapacitate you as a parent, planning should be put in place to name a guardian for your minor children as well as someone to manage your assets for your children. Instead of a simple Will, the husband and wife could prepare a will with testamentary trust provisions for minor children along with a power of attorney to manage assets, a medical power of attorney to manage health care, an advance directive to physicians (also known as a living will), and a HIPAA release to authorize disclosure of medical information. The will has two provisions for the children: (1) a designation of guardian over the physical placement of the children; and (2) an appointment of a trustee over the monetary assets of the children. Remember, ongoing involvement in the probate court requires formalities that increase the cost of administering your estate.
The court would appoint a testamentary trustee pursuant to the testamentary trust language in the will. The trustee would operate pursuant to the testamentary trust provisions, which normally state that the trustee can pay for any bills related to health, maintenance, and welfare of the children through the age of minority with distribution of principal amounts at ages 25, 30, and 35. This spreads the distribution of the principal over a period of years rather than delivering a lump sum at one age.
Alternatively, parents may consider a living trust with provisions for minor children similar to those described in the testamentary trust. A living trust is a contract that is enforced outside of the probate court jurisdiction, which therefore reduces the amount of government involvement considerably. Normally, a living trust is managed by trustees—persons whom the parents trust with the proceeds from their estates.
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