Planning for the future includes a wide variety of considerations. One is the age of children that will need to be provided for if their parents pass away. If sons and daughters will be adults at the time, they may be able to handle managing inherited funds directly. However, if they are very young, estate planning will need to take a different approach.

Minors, children under 18, can’t legally own property in their own name. While there may be state-by-state exceptions to this, it generally holds true. For that reason, the question of who will manage financial matters for the children until they reach the age of maturity needs to be addressed.

That person may be their guardian — the person who takes care of the children day by day. This is often a surviving parent or another relative with whom the children reside. However, for various reasons, financial matters may be taken care of by someone other than the guardian. That person, referred to as a conservator, can be designated in the legal documents of the deceased or can be court-appointed.

If the conservator is court-appointed, there may be disputes between surviving family members about who it should be. Avoiding those disputes and their corresponding costs is a good reason why designating a conservator is an important part of estate planning. The person selected should be trustworthy and good with money.

Whoever is chosen will want to take care of the money carefully. This is easier if some of the money is in trusts, which allows it to go to specific purposes like education. Trusts help to make sure that money isn’t misspent. These and other tools for estate planning when young children are involved can be discussed with an experienced attorney.

Source: MVProgress.com, “Estate Planning with Young Children” vrobison, Jul. 16, 2014