Provisions for Children

One of the most important things families need to address, regardless of estate size, is the question of who will take responsibility for raising minor children if Mom and Dad die prematurely. Deciding whom to name as guardian for your young children is critical.

The estate plan of a parent should provide for two contingencies: 1) the surviving parent’s death or incapacity to make decisions before the children reach the age of financial maturity, and 2) the simultaneous death or incapacity of both parents. Most people would agree that the two primary concerns for the estate plan in such situations are naming a suitable guardian for the children and administering the estate's assets in a way that will prudently provide for the children.

We recommend that you select as guardians a couple who share your spiritual values, first of all, and who will raise the children using the same godly principles that have guided you. It’s also important that they be in the same stage of life as you; couples who have already raised their children (including your own parents) may not welcome the challenge of starting afresh to raise the children you may leave behind.

Another important consideration has to do with the location of the guardians. We recommend that you choose guardians who live nearby, if possible, so your death does not also mean that the children will be uprooted from their neighborhood, their church, their school friends, etc., and moved to another city or state. The trauma of losing Mom and Dad could be dramatically magnified if a cross-country relocation is required.

Obviously, the choice of a guardian for your children is a very critical and personal decision, deserving careful consideration. Choosing a guardian and setting up a children's trust (outlined next) are paramount for a parent's complete estate plan.

It is critically important that the estate planning process addresses the needs of minor children, both in terms of their upbringing (guardianship) and in terms of financial requirements. Ensuring that all children are protected financially is usually accomplished through a children's trust.

To provide for a children's trust, married couples will typically incorporate language into their wills or RLTs stating that if the youngest child has not attained a certain age at the death of the second spouse, assets will be held in trust for the protection of the children. By holding the funds collectively in trust in this manner, you can ensure that funds remain available to meet the needs of all your children.

In conjunction with providing for a children’s trust under certain circumstances and determining how this trust should be structured, you must also consider how to supply adequate funding for this trust. As we have discussed, a good estate plan provides for the contingency of Mom and Dad leaving behind minor children.

For the children’s trust to fulfill its purpose, it must contain sufficient funds to address the needs of minor children. This is typically addressed by including life insurance in your estate. When preparing an estate plan, parents should ask the question, “If we both died prematurely, would sufficient funds be available for our children?” It is also important to ask the same question should either parent die prematurely. As you address these questions, if there are shortcomings, we strongly recommend that you consider adding life insurance for the protection of your loved ones.