So, you are the parent of at least one minor child?
If yes, then he or she is your most valuable treasure.
What arrangements have you made for their care should something happen to you and their other parent?
As with your own personal, health care and financial decisions, would you rather select the guardians (i.e., back-up parents) yourself, or let a probate judge make the selection without your input.
Only through proper legal planning can you select the guardians.
There are two critical choices commonly faced by parents of minor children.
First, who will take care of my minor children, if orphaned, and, second, who will manage their inheritance?
If you are separated, divorced or never married to the surviving biological parent of your shared minor children, then that parent will continue to be their guardian, absent a court-proven case of unfitness.
Nevertheless, you will want to make prudent choices regarding guardianship should your minor children be orphaned.
While every family situation is unique, here are some general practical pointers to consider when selecting guardians for your minor children:
- Select guardians who share your faith, values and life priorities; and already have an established positive relationship with your minor children;
- Consider, when selecting a married family member, appointing the family member only, in case your family member predeceases or they divorce;
- Make sure your legal plans provide for the compensation of the guardians, or at least that the inheritance is available to cover all legitimate expenses incurred when rearing your minor children; and
- Obtain permission of the selected guardians before appointing them in your legal instruments. That is only meet and right.
Great care must be taken when selecting a financial fiduciary to administer and distribute the inheritance.
Fiduciaries are held to the highest standards of care and loyalty in this role.
Who will manage any inheritance left upon your death?
What if you and the other biological parent are divorced or were never married?
Even though he or she may rear your minor child or children to adulthood (i.e., age 18 in Kansas and Missouri), would you also want them to control the inheritance you leave behind, too?
I did not think so.
As I see it, there are three basic options when it comes to financial fiduciaries, each with its unique advantages and disadvantages.
We will call them Door #1, Door #2 and Door #3.
Door #1 is the most common option.
Here you appoint trusted family members of friends.
On the upside, they likely know the strengths and weaknesses of your loved ones, plus they may not charge much, if anything, to oversee the inheritance.
On the downside, they may be busy with and distracted by their own life and financial responsibilities.
Also, they may find it difficult to say “no” to an irresponsible heir. If uncle Bob is the fiduciary for nephew Billy, then their relationship if certainly changed (and hopefully not strained).
Door #2 finds you appointed a professional fiduciary, such as an institution (e.g., a trust company) or an individual (e.g., your CPA).
Interestingly, the upsides and downsides are the opposite of Door #1.
Door #3 is what I call the Pro-Am approach.
You combine Door #1 and Door #2 for the best of both worlds.
In short, the family appointee knows the strengths and weakness, has an “abominable no-man” to help preserve family relationships when Billy asks for a Ferrari, and is not bogged down with investments, accounting, tax and legal details.
Instead, the professional fiduciary shoulders (and is rightfully compensated for) the day-to-day management of the inheritance, playing the heavy when necessary.
As you can see, selecting guardians and fiduciaries is essential for the physical and financial well-being of your minor children.
Few decisions in life are more important.
Only you can make these decisions through proper estate planning.
If all this sounds like something you would want to avoid, then contact an experienced estate planning attorney as one of your first new year's resolutions to get the ball rolling.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there