As our families grow, change, and become more complicated, their estate plans must grow and change with them. Those with minor children need to pay careful attention to their estate plans after divorcing their spouse. These individuals have two main estate planning concerns: guardianship and inheritance.
Guardianship determines who you would like to care for your children if you’re unable to care for them because of your incapacity or death. The child’s guardian will be responsible for providing the child with food, shelter, support, and education. Guardianship also concerns visitation of your family should you die before your former spouse.
For the benefit of your children, it is important to sit down with your former spouse to develop a unified plan for guardianship. Typically, parents will designate the each other as the guardian of the child. Barring extraordinary circumstances, the remaining parent is usually granted guardianship under state law in the event of the disability or death of the other parent.
Inheritance concerns what assets your children will receive from your estate after you die, as well as how they will receive the assets. Typically, the parent will appoint the guardian to manage any funds left to the child. If you are concerned that your child’s guardian will not be able to manage the funds appropriately, consider setting up a Revocable Living Trust to hold your child’s inheritance. In the terms of the trust, you can designate that the trustee only use the funds for specific purposes that benefit the child, such as education related expenses. You can also designate in that the funds only be paid out to the institutions providing the services to the child, rather than to the guardian directly.
Article Credit: EstatePlanning.com