Who will take care of your children if, unfortunately, you are no longer able to do so? At Wall Law we can assist you in planning for the future of minor children in Oakland County, Wayne County, Macomb County, and surrounding Metro Detroit areas. If you are no longer able to take care of your children who can you trust as guardian?
Are you, and your children, prepared for the unexpected? While every parent expects to guide their minor children to adulthood, life may throw any of us an unexpected curve ball. Who would you legally appoint to serve as their back-up parents to fulfill your parental responsibility? Your answer may depend on how family is defined for you. Is yours a single-parent family, a blended family or a traditional family?
Single-Parent Family Planning
As a single parent household, seeking an attorney’s assistance for family planning can enable you to set up the guardianship of your choosing instead of leaving this responsibility up to the government. If you are a single parent, then the surviving biological parent automatically retains the natural guardian, unless proven unfit. Without contrary legal arrangements, the surviving parent likely will manage the inheritance under applicable state law (e.g., typically age 18), and your children will receive whatever is left of their inheritance without guidance or restriction.
What happens if both you and the other parent are deceased? In this case, if there are no proper legal plans in place, a judge will select back-up parents (i.e., guardians) for your minor children and see that the inheritance is distributed outright at the age of majority.
Blended Family Planning
Couples often bring children into a marriage from a prior marriage or union and then have children together. This is referred to as a blended family. When the minor children in the household may be “yours, mine and ours,” how do you select the back-up parents… especially when the children consider themselves to be one family? Should the minor children remain together, if possible? If not, then with whom should they be placed and how should legal arrangements be made to facilitate their ongoing contact?
Traditional Family Planning
If yours is a traditional, nuclear family, then the whole matter seems rather simple, doesn’t it? The surviving parent remains the natural guardian. However, what if both parents are deceased? Will your children be raised by their paternal or maternal side of the family? That is when things can get complicated. In some cases, both sides of the family may not know one another and, even if they do, may live on opposite coasts. Alternatively, perhaps you would rather your children be raised by good friends in a stable marriage who share your values and lifestyle?
What to consider when selecting guardians for your minor children:
- Select guardians who share your religious beliefs, core values and life priorities and already have an established, positive relationship with your children;
- When selecting a married family member, appoint the family member only, not their spouse, in case they divorce or your family member predeceases;
- Ensure that your legal plans provide for compensation of the guardians, or at least that assets are available from your children’s inheritance to cover all expenses incurred on their behalf; and
- Obtain permission of the selected guardians before appointing them in your legal plans.
Every family situation is different. Nevertheless, we are here to help guide you and your family when you consider the options for guardianship of your minor children.
Inheritance Planning Options for Children
Inheritance planning is the designation of legal instructions that will specify how your assets will be distributed to your children. Once guardians are appointed, great care must be given to any inheritance left to your children. Inheritance planning requires managing the distribution of assets to the appointees. There are multiple options for planning the distribution of inheritance including outright distributions, staggered distributions, and discretionary trusts. At Wall Law we will review your situation and work with you to create the best plan for you and your loved ones.
In the absence of any legal arrangements, the laws of most jurisdictions provide for the outright distribution of an inheritance to a child who is at or beyond the age of majority (e.g., age 18 in most jurisdictions). Children who are under the age of majority receive their lump sum inheritance upon reaching that age.
Bottom line: Following an outright distribution to your children, the full inheritance may fall prey to such common threats as divorces, lawsuits, bankruptcies or squandering. If you worked hard to accumulate your wealth, then you may want to protect any inheritance for your children or from their potential financial immaturity.
The staggered distribution method is a bit more complex. It holds the inheritance of a child in trust until such time as outright distributions are triggered by such terms as you may determine. Oftentimes, parents will designate multiple distributions of a percentage or fractional share upon a child’s attaining certain ages or reaching certain goals set by the parents. Regardless, at some identifiable point the trust share of the child is terminated and the entire inheritance is distributed to them.
Bottom line: This staggered distribution arrangement provides increased protection from the common threats addressed in the outright distribution. Staggered distribution is a good choice for parents seeking even greater protection of their children’s inheritance.
The outright distribution and the staggered distribution methods appear to be simple options for distributing inheritance. However, of what value is an inheritance if it is taken or lost unnecessarily? Alternatively, an inheritance may be held in a long-term discretionary trust to protect it both for and from your child, regardless of their age. In such a trust, you set the terms under which the inheritance is available for your child.
Bottomline: If properly constructed, a discretionary trust may own assets for the use and enjoyment of your child and even your grandchildren for generations without the risk of loss between generations to divorces, lawsuits, bankruptcies or squandering. Discretionary trust planning allows for more flexibility, creativity and control over inheritance.
Wall Law is your Metro Detroit lawyer for life and can help you understand your planning options to preserve your wealth and family values for future generations. Have peace of mind, contact us today, and learn more about how we can help meet your family planning needs in Oakland County, Wayne County, Macomb County, and surrounding Metro Detroit areas.