Creating a comprehensive and well thought out estate plan is something everyone should make a priority. If you are the parent of a minor child, however, the need to have an estate plan in place is heightened for several reasons, starting with the fact that your child is, of course, is your most valuable asset. Because your minor child cannot inherit directly from your estate, you must plan ahead to ensure that your child is well cared for in the event something happens to you. Working closely with a North Carolina estate planning attorney is the key to creating an estate plan that reflects your needs and goals as the parent of a minor child. Although no two estate plans are identical, there are some common concerns parents with minor children have as well as tax and estate planning strategies to deal with those concerns.
Your Last Will and Testament
You may think that your Last Will and Testament will not play a very important role in your estate plan given the fact that your minor child cannot inherit directly from your estate. Your Will, however, can still play an extremely valuable role in your estate plan because your Will is the only opportunity you will have to nominate a Guardian for your minor child. In the event that both you and the child’s other parent are unable and/or unwilling to serve as the child’s legal caretaker, a court will have to appoint a legal Guardian. Ultimately, the court must make the appointment; however, if you nominated a Guardian in your Will, the court will generally appoint the person you nominated unless there is a good reason not to do so. Before you sit down to get started on your estate plan, take the time to contemplate your choice for Guardian to make sure you choose the right person.
Do You Need Incapacity Planning?
As the parent of a minor child, your own death is not the only thing you need to consider when creating your estate plan. You could also become incapacitated tomorrow. Incapacity is not limited to the elderly who are suffering from Alzheimer’s or other age related dementia conditions. Incapacity can strike the young as well as the result of a tragic accident or debilitating illness. If you were to become incapacitated tomorrow, who would take care of your child? How would your designated caregiver pay for taking care of your child? What would happen to your home and other assets during your incapacity? The only way to be certain of the answers to these questions is to include an incapacity planning component in your estate plan.
Do You Know What It Will Cost to Raise Your Child?
We have all heard how expensive it is to raise a child to adulthood, particularly when college tuition is included. Before you start on your estate plan, take the time to figure out just how much you think it will cost to take care of your child in the event something was to happen to you. Not only do you need to know how much it will cost, but you also need to focus on your estate’s liquidity. Having $200,000 tied up in real property does not do your child’s Guardian or caregiver nearly as much good as having $100,000 in cash in a bank account.
Do You Understand How a Trust Works?
Most parents choose to include a trust in their estate plan as the mechanism best suited for holding assets designated for the child(ren). A trust offers a number of benefits to the parent of a minor child, including:
- The ability to appoint a Trustee who will manage the trust assets and oversee the administration of the trust.
- The option to transfer a wide variety of different types of assets into the trust
- The ability to create trust terms that fit your objectives and goals
- The option to disburse the funds in the trust in staggered disbursements instead of in one lump sum.
If you have additional questions about estate planning for the parents of a minor child in North Carolina, contact an experienced Greensboro estate planning attorney at The Law Offices of Cheryl David by calling 336-547-9999 to schedule an appointment.