Planning for New Families

Happy news! A member of our RCG team recently welcomed a new child into the world. This major life event for our colleague reminded us how busy preparing for a new little one can be. In addition to the long list of registry items to purchase, daycare waitlist to crack, and preparation for a reduced workload during those first delirious newborn months, parents should not forget to add “plan for the unexpected” to the list of “To-Do’s.”

As new or young parents, it is difficult to imagine that we will not always be around to care for our own children. However, it is important to plan for this possibility and to set our children up as best we can in the event of the unexpected.

For parents with young children, an estate plan primarily focuses on designating individuals who will care for your children, and secondarily, the distribution of your assets and management of estate taxes. When developing an estate plan with young children, parents will designate two crucial roles relating to the care of their children: their children’s guardian, and their financial trustee.

There are a few factors to consider when designating guardians for your children:

Considerations when choosing a guardian for your minor children:

A Guardian is the individual appointed to raise your children if you are unable to. Unless you designate this individual in your Will or Trust, the Court will select a guardian, often a close family member, for your children. While this may not pose an issue for some parents, others may wish to have more control over the selection process. By designating a guardian in their Will or Trust, parents are able to provide explicit instructions as to who will care for their children, and even provide instructions on how to begin by providing care instructions for the new guardian. When considering whom to designate as a guardian, consider some of the below questions:

a. Is this person trustworthy to care for my children?

b. Does this person share my same/similar values such that they will raise my children in the manner I intended?

c. Is this person physically and mentally able to care for my children?

d. Does this person live in physical proximity such that my children would not need to be uprooted from community or school?

e. Is this person financially stable such that he/she is able to care for my children?

f. Will this person care for my children as they would care for their own?

Appointment of a Financial Trustee for your minor children:

A Trustee manages and protects a child's inheritance in the manner the parents instruct through their Will or Trust, until the child reaches the appropriate age – at least 18. Examples of a trustee’s duties include management of taxes, bills, financial accounts and distributions for the child throughout his or her adolescence. The trustee is often understood as the financial safeguard until the child is responsible enough to manage his or her own financial affairs.

Part of the responsibility of becoming a parent is caring for your child's future when the unexpected happens. This can be done through a well-thought-out estate plan that takes into account your hopes, dreams and legacy that you intend for your children. To begin this process, or to learn more about how the estate planning process works, contact our team at RCG. We are here to help you care for and protect your family.