St. Louis Asset Planning for Children Estate Lawyer
The common phrase “don’t put off until tomorrow what you can do today” could not be more true than in estate planning. For many, they feel their assets are not substantial, so they can put off important decisions. Unfortunately, for those couples with children, the decision to delay can create obstacles for their children if anything should happen. With proper planning, regardless of the asset amount, parents can provide protections for their children both financially and, if they are minors, for guardianship as well.
When it comes to estate planning that focuses on your children, Stange Law Firm knows you want to make the best decisions possible to ensure they are protected and have the financial resources needed to continue their quality of life. Every parent wants to be able to provide for and protect their children, which makes estate planning sooner rather than later an important part of the parenting process. Our attorneys know the difficulties of these conversations and will work diligently and delicately to help create the right plan for you and your family.
How Does Estate Planning Establish Guardianship?
If the worst happens and you pass while your child is still a minor, the question of guardianship will be one of the first that is raised. There are a number of circumstances that could leave your child without a legal guardian upon your passing. Without an estate plan in place, that guardianship decision will be left to the court system, which will make a determination in the best interests of the child. This could result in the child being placed with a family member, or they could be placed in the custody of Child Protective Services. Either way, the only sure way to feel confident your child will be cared for in the way you want them to be is to plan for that guardianship.
Choosing whom to name as the guardian of your child may be a difficult decision, but one that should be considered carefully. The person nominated will act as the child’s parent until the child is 18. The guardian will need to make medical decisions, education decisions, financial decisions, and more, all on behalf of the child. The person you choose should be stable, and you should feel confident that they will provide the care you want. Some considerations include the following:
- Age. The intended guardian must have reached the minimum legal age of 18. Other considerations could include if, for example, they are elderly and how their age could play a role in their ability to care for your child.
- Commitment. You should have a conversation with a potential guardian about their commitment to caring for your child.
- Temperaments. Take into consideration the person’s temperament compared to your child’s. If your child is very active, but the person you choose is not, they may not be a good fit.
- Religious beliefs. You will want to consider if their religion or moral values match what you have already established. Changes could be difficult for your child.
- Existing children. You will want to know if your child is going to be introduced into another home with children and what that dynamic might look like. If they do not have children, consider how they may engage with the children of others.
- Location. Consider your child’s community, school, etc., and decide if you want them to stay there.
- Finances. Ensure they have the financial resources to care for your child. A consideration is what other elements of your estate planning look like, as you may have structured finances to assist with the care of your child.
Who you appoint as a guardian may not seem like an asset to plan for, but that person is ultimately an investment you are providing for your child. You have affirmed that they will continue providing for and protecting your child as if they were their own.
How Do I Leave Assets to My Children?
Once the guardianship in your estate plan is finalized, you will want to then make decisions on your physical assets. In the event of your passing without a plan in place, the state will use a formula to determine the distribution which will pass your assets to a surviving spouse or children. However, creating an estate plan gives you control over who receives a distribution, how much they receive, and the structure of how they receive it.
One of the most common ways to pass your assets to your children is through the use of a trust. The most common types of trusts that you could use include the following:
- Revocable living trust. These types of trusts are created while the grantor (you) is still living. Upon your death or at a designated time, the trust becomes effective. It can be altered or revoked up until the time of death. A benefit of this type of trust is that it avoids probate court.
- Irrevocable trust. Unlike the revocable trust, once this type is legally bound, it cannot be altered or revoked. Many use this type of trust to avoid certain taxes.
- Special needs trust. This type of trust helps to set up long-term financial care for a beneficiary that has special needs and may need healthcare assistance well into their lifetime.
Unlike a will, a trust allows the parent to determine the amount the child will receive, at what age they will receive it, and how much they receive. This means that you can designate specific amounts for various stages in their life. You could set money aside that is designated for college that is only accessible under certain terms, or you could set the terms to release all the funds at a certain age.
Trusts also prove beneficial in guardianship. If, for example, your children are living with the surviving spouse, but they are not financially responsible, or they remarry, the trust can set aside funds that are specifically released under parameters designed for the best interest of the child.
Without a properly established plan or trust in place, a court may designate a conservator who will oversee any funds or property that your child inherits. They will not regain control until they reach the age of 18. The downfall is that a conservator must also provide regular updates to the court, which would incur costs that could be taken from the funds left to your child.
What Is a CDA Savings Account and How Does a CDA Account Work?
Another way to help set needed assets aside for your child is through Child Development Accounts (CDA). These are savings or investment accounts that are, in some states, automatically set up for children, and contributions are provided by public and private deposits. The purpose of these types of accounts is to provide funds for a child to provide assets for continued development targeting post-secondary education or home ownership. These types of accounts try to appeal to the data that suggests that children who have even $500 in their CDA are three times more likely to attend college.
In St. Louis, this program is known as College Kids. Under this program, every kindergarten student in the public school system receives a $50 deposit. Funds grow through matching donations, attendance bonuses, deposits from family, and from parents who participate in financial education courses. Additional funds come from parking revenue such as a parking ticket, a parking meter, or from city-owned parking garages. These funds can only be accessed for withdrawal when a child enrolls in post-secondary school, including trade schools.
These types of accounts can offer positive opportunities for long-term investments but may also have penalties for early withdrawals. However, if you are looking for additional ways to help invest in your child in the event that you pass, you can structure a deposit into your child’s CDA that can be held until they enroll in post-secondary school.
St. Louis Estate Planning Lawyer
Estate planning can be a difficult process, but a necessary one at any age and with any amount of assets, particularly for those who have minor children. Knowing that if something were to ever happen to you, your family would continue to be provided for both emotionally and financially can give you peace of mind. More importantly, leaving you the confidence to share your estate plans with your children should you choose to do so.
At Stange Law Firm, we have nearly 20 years of experience in legally enforceable estate planning. Our team of attorneys can help guide you through the process and show you the options that make the most sense for your circumstances. We want you to continue to live a long and healthy life, but for your children, we want you to feel confident that if anything happens, they will be loved, cared for, and taken care of as if you were still here. We don’t know how many tomorrows we have. Contact our office today and let us help you plan for them all.
Greene County, St. Louis Office : 901 E. St. Louis, Suite 404, Springfield, Missouri 65806