Young parents are wise to put together an estate plan. Parents who are not quite convinced of this need may find the incentive they need when they consider how inheritance would work if they did not put together a plan.
Without a plan, state law goes into effect
The distribution of the estate is governed by state law. As a result, it can vary depending on where you and your family live. In Florida, as in most states, the estate generally goes to the closest kin. So if both parents die and leave behind young children, that means the minors get the estate.
But not really. Instead, the court will likely appoint a guardian or conservator to manage the estate on their behalf.
Parents can bypass this headache by putting together an estate plan
Having the court appoint a guardian takes time and costs money. It adds additional, avoidable stress during an already stressful time in the child’s life. Parents can help ease this stress by putting together an estate plan that includes the legal tools needed to avoid this problem. This can include:
- Guardianship. Name who will be responsible for raising the children. By doing this yourself, you save everyone from going through the time and expense of having the court name a guardian on your behalf.
- Trust. A trust is a legal tool that helps guide distribution of assets. It is important for parents of minors because it provides a named individual or institution, referred to as the trustee, the ability to use the inheritance to help with the children’s outbringing.
A trust can also provide more long-term guidance instead of allowing children to get the full inheritance at the default age of 18 or 21. This could help encourage kids to use the funds to pay for college, other forms of higher level education, a home, travel or other things that you would like the funds to go towards instead of letting the children have full control at such a young age.