Florida Elder Law & Estate Planning Blog

Six Estate Planning Steps If You Have Minor Children

Every adult with people and assets to protect needs a plan to protect loved ones in the event of incapacity or death. And what better example of a person with people to protect than the parent of a minor child?

As a parent to one or more minor children, you no doubt have a busy life with plenty of issues to attend to other than your estate plan, and the prospect of your not being around to raise your child may seem remote. And thinking about your mortality may feel very uncomfortable. But what is even more uncomfortable is worrying about what would happen to your child if the worst came to pass and you had made no contingency plans. If you are like most parents, you will get a much better night’s sleep when you know you have a plan in place.

What follows are the steps our attorneys recommend for clients who have young children. If you yourself do not have youngsters, please share this post with those who do.


1. Buy Life Insurance On Your Life


Parents of young children are typically shouldering a multitude of expenses, but purchasing life insurance is an essential expense. Consider buying insurance on your life, be it term insurance or whole life insurance. If the policy designates a beneficiary, the proceeds will not have to go through probate. Do not name your minor children as beneficiaries, as that would require a guardianship to be established. Instead, designate a trustee of a trust established for your children, either under your Last Will & Testament or your Living Trust.


2. Create a  Health Care Surrogate For Your Child


Suppose your child becomes ill and needs medical attention, and you cannot be readily contacted if an immediate health care decision must be made for your child? This is why you need a Designation of a Health Care Surrogate of a Minor. This document authorizes another person or persons to make your child’s health care decisions. Make sure that the surrogate form includes a HIPAA release so that medical providers will release confidential information to those you want to have it. If there are two parents, both parents should execute the same instrument. 


3. Name a Guardian For Your Child In Your Will


You should create a will that nominates a guardian of the person for your child if you pass away. This is the individual who will actually raise your child. If there are two parents, each should have his/her own will, in case both are deceased.

As you think about whom you would want to raise your child, consider the individual’s financial and marital circumstances, values, and moral and religious orientation. Does the person have children of his/her own, and how are those children being raised? Make sure you discuss your desires with the person you nominate. Be sure to name backups, in the event your first choice is unable to serve.

Frequently, the first people parents think about designating are grandparents. That can be a good choice, but keep in mind that a grandparent should be strong and healthy enough to raise a young child. Also, if grandparents do not live in your community, your child may be further traumatized by having to leave his familiar environment, friends, school. These points all require serious consideration.

The court will have the final say-so regarding who serves as your child’s guardian. However, unless the nominated guardian is clearly unfit, the court tends to go along with the parents’ choice. If you fail to name a guardian, the court will make the choice for you, and that person may not be who you would want taking your place. In addition, failing to name a guardian could lead to disputes among family members as to whom should serve. Those disputes can be expensive, contentious, and detrimental to your child.


4. Name A “Guardian Of The Property” In Your Will


Your will should also nominate a guardian of the property – in other words, someone who will manage your child’s funds. This could be the same individual as the guardian of the person, but not necessarily. If you fail to name a guardian of your child’s property, the court will designate the person in charge of the money, and your child will receive the money at age 18. Most of our clients do not believe it is wise for an 18-year-old to receive a significant lump sum, and prefer to designate a trustee to manage the child’s funds and distributions.


4. Include Provisions for a Testamentary Trust In Your Will


As noted above, we generally recommend that parents include in their will a provision to create a testamentary trust for their child’s benefit. You should designate a trustee to manage the assets, as well as back-up trustees. When you die, the trust will be the receptacle for life insurance proceeds and other funds (for example, money from a wrongful death lawsuit).

The advantage of a testamentary trust is that it allows you to determine the age at which your child receives the money, and can also set other conditions on the distribution of funds. Without the trust,  your child will receive the funds as a lump sum at age 18, when he/she may lack the maturity to manage money wisely. You may also include directions as to how the trustee should use the money for your child’s benefit – for example, education, health.


6. Create A Common Pot Trust


Making the trust a common pot trust is a good idea for parents with more than one child. A common pot trust gives the trustee discretion to use the funds for each child based on each child’s individual needs, rather than requiring a strict equal division of assets. For example, one of your children may end up needing far more expensive medical care than siblings do. One may need financial help to earn a doctoral degree, while another may opt for one year of trade school.

A common pot trust is particularly important if you have children with a significant age difference. If a younger child gets the same percentage of assets as a much older sibling, it may not be sufficient to cover the younger one’s needs, as he has more years ahead of him before he becomes self-sufficient. A common pot trust ensures that each of your children will be supported based on his/her individual needs.

If there are two parents, each should have his/her own will containing the common pot trust clause. The will usually indicates that the parents leave everything to each other, but if they both die, the estate will pass to the common pot trust. The trust is generally dissolved when the youngest child achieves a certain age and then, the remainder is divided equally among the children.


The Karp Law Firm attorneys assists parents to set up a thoughtful estate plan that protects their young children. Call us at (561) 625-1100 to schedule a free consultation.