As parents, we all have hopes and dreams for our children. We picture the milestones of graduation, marriage, career and everything in between. And we picture ourselves beside them, supporting them, guiding them, challenging them, and just being there for them.
But if the unthinkable should happen, would your clients’ children face the future with a carefully prepared plan, or without one? Here are three ways your parent clients are putting their children at risk by not having an estate plan in place.
See also: 5 estate planning black holes
1. The court will choose the children’s guardian.
Choosing a potential guardian for your own children is emotionally challenging. Parents must consider the specific needs of the children, the family dynamics … and the list goes on. It is a tough decision to make. But if parents don’t make it in advance, a judge will. Will that judge know and understand all of the children’s needs like a parent does? By completing a will, parents make the choice.
2. The court will manage the children’s money.
Life insurance and retirement benefits, along with the rest of your client’s estate, can’t go directly to his or her children. In California and in most states, the executor will have to put that money into a special account that requires court permission to access. The court will not award the estate to minor children until they turn 18. Even the guardian will not be able to access any of that money without the court’s approval. However, with a trust, the trustee is completely in charge and does not have to ask permission from the court when choosing how to best use the estate to support the children.