Parents are concerned with how the assets left to their minor children will be managed until the child reaches maturity. Many parents prefer to have the assets held in trust for the child until they reach 25, 30, or even 35 years of age. A testamentary or contingent trust is a trust that comes into effect upon your death. Both probate and non-probate assets (i.e. life insurance) can be funneled into the trust. Parents should appoint as trustee the person that the parents trust will manage the assets for the benefit of the children as the parents would in the same circumstances.
If a trust is not established to receive the life insurance proceeds, and if the life insurance beneficiary designations are not properly established to fund the trust, the court will appoint a conservator to handle the children’s funds or the funds will be placed in the registry of the court. Accessing these funds for the child’s benefit can be cumbersome and expensive, and the child will have full control of the funds when they turn 18 years old.
For the young family, estate planning may be as simple as two wills with testamentary or contingent trusts. As the family acquires property, life insurance or retirement plans are acquired, special consideration should be made to determine how each asset should be titled and who should be named as beneficiary.
Parents should keep careful records of all property acquired and review the estate plan periodically to make sure it continues to meet the family’s needs. As a family changes, the children grow up, and the size of the estate increases, a family’s goals change. Revisions in estate planning will aslo be needed over time as circumstances change. Review your will periodically and consult an estate planning lawyer when changes are needed.