Planning for Minors in Your Estate Plan
Many of our clients have minor children in their families, whether they are children, grandchildren, or other relatives. If you want to make these children part of your estate plan, there are a few important considerations to make before you do so.
The first set of issues deals with naming children as beneficiaries or heirs in your estate plan. It is important not to leave assets directly to a minor, whether they’re a beneficiary under your will, a beneficiary of a life insurance policy, or a beneficiary of a retirement account. Money cannot be left directly to a minor, so if you pass away before your child turns eighteen, a court will have to appoint a temporary conservator to manage the funds until your child is of age. Not only is this expensive, but it comes with annual reporting requirements. The other issue is that, once your child turns 18, he or she will be entitled to collect the full amount of the money outright. Most of our clients would not want an 18-year-old to be left a large sum of money to manage but would rather put some safeguards in place until their child reaches a more suitable age.
The easiest solution to this problem is to create a trust of which the minor is a beneficiary. The trustee of that trust would manage the money and would follow the distribution guidelines set out in the trust. The trust can also specify the age or ages at which the child is to receive an outright distribution of the remaining funds in the trust.
Another issue that many parents do not think about is who will have the authority to care for their children if both parents die before the children turn 18. It is important to name a guardian or guardians in your will who would have the ability to care for your minor children if the unthinkable happens. Failure to name a guardian could lead to confusion or conflict within the family upon your death as the surviving family members struggle to navigate who will have the ability to care for your children.
Although it is never enjoyable to think about the possibility that you may pass away while your children, grandchildren or other loved ones are still minors, it is important to plan for the possibility that this could happen. An estate planning attorney will be able to draft a plan that protects your children or loved ones and gives you peace of mind that everything will be handled properly upon your passing.
Hook Law Center: Jolene, what can you tell me about the elk in Colorado that had a tire stuck around its neck for two years?
Jolene: This story has a happy ending. Colorado Park and Wildlife (CPW) officers recently removed a tire off an elk’s neck after several failed attempts to help the elk earlier this year. The elk was first spotted with the tire in July 2019 during a wildlife population survey. Between 2019 and 2021, CPW tracked the elk on trail cameras, and when its herd started appearing closer to residential areas, they took the opportunity to find and tranquilize the elk. Once the 600-pound elk was tranquilized, wildlife officers sawed off its antlers and removed the tire. The elk then went on its way, 35 pounds lighter after the removal of the tire, the debris in the tire, and the antlers. Thankfully, the elk had no significant injuries.