Who Will Manage My Child’s Finances if I Die
Many parents with children under the age of 18 create a will to name a guardian for their children should both parents die unexpectedly. Although they name a personal guardian for their children, what about the financial aspect – particularly if their children inherit the parents property outright as well?
The question of who will manage a child's estate may be solved by leaving a child's property in trust to be managed by a trustee, instead of a court-supervised conservator, who would be appointed if property is left outright to the child. The trustee manages the property according to the guidelines established.
Leaving property in trust may be more flexible than leaving it outright to the child. For instance, most parents want their assets to be available to fund a college education for their children. Many parents would rather have their assets held in trust until their children are more responsible and probably finished with college, instead of giving them their share of the assets when they reach the age specified by the state.
If both parents are deceased, a testamentary trust (one that is created by the will) may be an effective estate planning tool. If parents make appropriate beneficiary designations on their non-probate assets, such as life insurance policies and retirement plans, the proceeds of those policies and plans can be deposited directly into the trust without passing through probate.
A testamentary trust can be created only with a will. It cannot be created if the parents die without a will. In the will, the parent names the individual or corporate fiduciary who will serve as trustee. The trustee manages the assets, handles accounting and tax returns, and makes distribution decisions about the trust assets until the trust is closed and the remainder is distributed to the children according to the terms of the trust.
ABOUT THE AUTHOR: Richars Schneider
Experienced estate planning attorneys of the Law Offices of Richard B. Schneider LLC offer estate planning and business planning resources to residents of Portland OR.
Copyright Law Offices of Richard B. Schneider, LLC
More information about Law Offices of Richard B. Schneider, LLC
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.