One of the most basic goals of a parent’s estate plan is to include care for children. To make certain that parents’ wishes are followed, they should explore creating an estate plan based around a Trust with provisions specially designed to protect their children. Wills may designate a guardian and a conservator in case both parents die, counsels The Choteau (MT) Acantha article entitled “Plan for children’s future when making out a will.” Trusts can do so much more, and are often employed by parents on Cape Cod and Plymouth.
A guardianship provides for the care of the children, until they reach adulthood (usually age 18) and gives the guardian the authority and responsibility of a parent. A guardian makes decisions about a child’s well-being, education and health. A conservatorship is designed to manage and distribute funds and assets left to children, until they’re age 18. A single individual can be appointed to do both roles, or separate people can be designated as guardian and conservator.
Frequently, the toughest decisions parents have is agreeing who they want to have the responsibility of raising their children and managing their money. Usually they select a person with similar values, lifestyle and child rearing beliefs. It can be important to talk about the issue with older children, because some states (like Montana) permit children ages 14 and older to ask a court to appoint a guardian, other than the person named in parents’ wills. You should also name a backup guardian and conservator, in case their first choices aren’t up to the task and review your choices periodically.
In many states, the law stipulates that when children attain the age of 18, they are able to get the property that was in the care of a conservator, no matter what their capability to manage it. Another option is to leave the assets in a trust, rather than a conservatorship. Trusts can accomplish many more objectives than a standard will-based plan. For instance, a properly drafted Trust can result in tax advantages, protect assets for them if they develop a special need or incapacity and some trust can also protect children if an unexpected lawsuit or divorce strikes them later in life.
Not all trusts are the same. And, not all trusts have the benefits outlined here. It is important that parents create a trust agreement with McManus Estate Planning that provides for their specific goals and wishes. Trustees can be appointed to manage the trust assets and use the income for their children’s benefit in a tax-advantaged, protected manner. Such trust agreements transfer benefit to the children at the death of both parents, while maximizing legal benefits for all during life.
Reference: Choteau (MT) Acantha (May 13, 2020) “Plan for children’s future when making out a will”