SENIOR ATTORNEY, CALIFORNIA LAW PARTNERS, APC
One common question by parents is- whether there are any separate legal documents required for minors in particular? The answer is- No, protective provisions for your minor children can be inserted into your will and living trust without requiring any additional paperwork.
In a living trust or will, you can designate your children as beneficiaries of your property and assets. However, if they are minors at the time of the property transfer, then their monies can be held in trust and managed by their designated guardian and/or another responsible trustee that you appoint until they reach at least 18 years old. In essence, you can create a “trust” within a trust, specifically for minor children.
Here is an example of how this works: Holly and Roger have two minor children, Jackson, age 12, and Christy, age 8. On the way home from a dinner party, Holly and Roger were in a tragic and fatal car accident involving a drunk driver in the East County. Luckily, they had just completed an update of their estate plan less than a year ago.
In their separate wills, both parents designated Roger’s only sibling, Kathy, to be the children’s sole guardian since she does not have a family of her own and remains unmarried. By doing this and being coordinated in their decision making, there were no hurt feelings by Holly’s brothers and sisters who also would have taken the children into their homes. The family understood clearly their intentions and reasoning for this decision which allowed both sides of their families to grieve together and to stay close during this profound time of sadness and shock.
Although Holly and Roger have two separate wills, because they are married with a net worth of over $100,000 USD and in an effort to avoid probate fees/taxes, they placed the bulk of their marital estate, which is their primary home in Tierrasanta, their time share in Hawaii and other stock accounts in Charles Schwab, in the name of their family living trust. Jackson and Christy, as the only two children, are the sole beneficiaries sharing in the assets equally with a provision that the successor trustee can distribute the property to them when they each turn 25 years old. Holly and Roger chose 25 and not 18 years old as the age to inherit, because they were concerned about the kids’ maturity levels to manage a lump sum amount of money and property.
Until Jackson and Christy each turn 25, Kathy, as the children’s guardian, is a co-trustee and holds the property in trust for the children and will only use the funds for the kids’ life necessities, such as food, housing, education, extra-curricular activities and general living expenses. Holly and Roger knew that Kathy is very loving but not the best at managing money, so they also assigned Holly’s oldest brother, Kurt, a college graduate and small business owner, as a co-trustee of the children’s minor trusts along with Kathy. This has proven to be a wise decision to serve as a check and balance of the funds’ usage for and on behalf of the children, and this also protects Kathy from other family members questioning her decision making.
Ultimately, a will and trust allows you the benefit of staying in the driver’s seat. From the onset of the document drafting, you can control- at what age the children receive your assets, who should parent them in the event you cannot, and who will assist in disbursing their living expenses until they can inherit the funds outright. For new families or parents with minor children, a will and trust is an important type of insurance policy that can protect your kids’ futures in case of extreme emergencies.
Wendy serves as a Senior Attorney at California Law Partners, APC (www.californialawpartners.com) and specializes in estate planning and asset protection. For any questions or comments, please contact firstname.lastname@example.org or (619) 320-6065.