Estate Planning with Minor Children

August 9, 2017

By: Rebecca A. Miller

One of the most important considerations in an estate plan is who will take care of your children if something happens to you and your spouse. If you fail to designate a guardian, the court will be forced to choose one for you. 


As you can imagine, this can result in unnecessary family conflict and financial expense. You can avoid this process by designating a preferred guardian (and a back-up) ahead of time by leaving instructions in your estate plan. The court still makes the ultimate determination in appointing a guardian based on what is in the best interest of your children, but your designation will be honored by the court a vast majority of the time.

Another important consideration is at what age you would like your children to inherit and control property. Children under the age of 18 typically cannot own property, and parents may have various reasons to delay an inheritance for children over the age of 18. To solve both of these issues, parents can place property in a trust for their children until they reach a certain age. 


The most common way of doing this is to create a “testamentary trust.” A testamentary trust only comes into existence upon certain events occurring, in this case, the death of both parents. While the property is in trust, a trustee manages and distributes property for the benefit of your children. During this time, your children typically do not have the ability to demand distributions. The trustee may be the same person as your designated guardian but does not have to be.


There are many different methods to eventually distribute property from the trust and to your children or their descendants. A few examples would be:  distributing a fractional share of the trust as each child reaches a certain age, distributing all of the trust property equally when the youngest child reaches a certain age, or making “stair-step” distributions to each child (for example, one-half at 25 and the remaining one-half at 30). Testamentary trusts can also have the added benefit of sheltering the child’s inheritance from creditors and other claimants (asset protection).

The designation of a guardian and the implementation of a testamentary trust, and its accompanying provisions, are two important issues that should be considered by every parent with minor children.