In conjunction with naming a Preneed Guardian to care for your minor child in the event of the deaths of both parents, parents with significant assets passing to a minor child will want to plan both for how these assets will be passed to the child and who will be the guardian or caretaker of the child’s inherited assets until the child is considered a legal adult at age 18.
The same person designated as the Preneed Guardian may also be named in the will as the guardian of the child’s assets. Sometimes, however, the parents may be more comfortable naming a different person to look out for the child’s financial needs and interests. The need for naming a different guardian of the child’s property/assets, and the expense associated with maintaining this type of guardianship, can be avoided by establishing a trust to receive the child’s inherited assets. At this time, the trustee will manage the child’s assets without being required to submit annual accountings to the guardianship court. The trustee can be the same person named as the Preneed Guardian if the parents are comfortable with this arrangement.
The creation of a trust for the child’s inherited assets can also solve the problem of significant assets being turned over to an eighteen-year-old because he or she is now a legal adult. Most eighteen years old lack the maturity and experience to effectively handle this type of financial responsibility. A trust can be designed so that control of assets is not released to the adult child until a later age, or even in successive stages such as 25 percent at age 25, 25 percent at age 35, and the remaining 50 percent at age 45.
If parents divorce, upon the death of one parent, the surviving parent will have full parental responsibility for the care of the child, unless he or she is shown to be an unfit parent. This is a very high bar to meet. The only control most single parents have in this type of planning is to put in writing the best plan for guardianship or other management of the child’s inherited assets if you don’t want the surviving parent to assume this financial responsibility. Your family lawyer can assist you in discussing these issues and securing expert help to guide you in making these important decisions for your child.