What will happen to my child if I die?
A lot of questions come up when thinking about who will be there to take care of your child if you die.
- What will happen to my child if I die?
- Who will raise my child if I die without naming a guardian?
- What will happen to my money if I die?
- Will my children get my money if I die?
Even asking these questions is terrifying. But knowing the answer to what will happen to a child if a parent dies is an important one to know the answer to.
There are a couple of issues that will need to be answered if a parent dies without having an estate plan in place. The first question is who will take care of your children? The second question is who will oversee your child’s finances? Courts will attempt to resolve these questions in your child’s best interest. Unfortunately, though a judge will do their best to answer these questions, they do not know your children. They do not know your family. And they will not know who is the best person to serve in these roles compared to a child’s parent.
What will happen to my child if I die? Where will my child live if I die? Who will raise my children if I die without naming a guardian?
The first issue that a court will need to resolve in answering these questions if a parent dies without having a will is who will physically take care of your child. Wills enable parents to specify who will take care of their child in the event that the parent dies when the child is a minor. If a parent passes away without a will that contains a guardianship designation, the courts step in to try and determine the child’s best interest. The court will place the child where they find is best. If you feel that you, rather than a judge are better suited to identify who will get to take care of your children if you are unable, an estate plan is vital.
What will happen to my money if I die? Will my child get to have my money if I die?
The second issue that a court will resolve if you die without an estate plan is who will take care of your child’s money. Think about what all of those things could be:
- Life insurance
- Home equity
- 401K contributions
- Bank accounts
Many parents have life insurance, money in their bank account, or home equity that would be available for their child if they were to pass away unexpectedly. But if you want the money to be used in a certain way, e.g. for college, trade school, soccer camp, ballet, or a wedding to name a few examples, you must have a plan in place. If you don’t, a judge, a stranger to your family will appoint someone for you. This person is called a conservator. This court appointee will manage your child’s funds and then issue your child a check at the age of 18.
- Does a court appointed conservator know your child’s lifestyle or interests?
- Is your child responsible enough to receive all of their money at age 18?
How responsible were you when you were 18? Would you want your child to have unfettered access to your home equity or life insurance funds at 18? Most parents say no. An alternative to having a court choose someone to manage your child’s money is to create an estate plan that includes a trust. The trust funds would be managed by the person you, not the court, chooses. The trustee would use the money for your child’s health, education, and general support. You could stipulate that your child receives money to pay for college tuition or some other purpose after they graduate from high school. Then, you could specify at what age or ages your child receives any remaining money from the trust. Creating an estate plan puts you in control – not a court.
You can keep a court out of your family’s life by planning ahead. This includes making a guardianship designation and writing a trust that will help you put strings and limitations on how your child is allowed to spend any money that he or she receives from you. Estate planning is so important for parents of minor children.
Please contact us for assistance.