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Estate planning 101: What happens to my children if I die?

by | Apr 30, 2021 | Estate Planning |

Parents of young children may feel like they are in survival mode. Afterall, they are often rushing between work, school, taking care of their children, and getting them to activities to help ensure they learn social and academic skills to set them up for success all while trying to maintain some level of sanity. Add in the stressors of the pandemic and it’s no surprise many parents have not taken the time to put together an estate plan. But, likely as part of the stressors of the pandemic, parents have also found themselves contemplating their own mortality and asking a very important question: what happens to my children if I die?

This question is really two questions. First, what happens to their daily life? Who takes over actually raising them? The answer will depend on a couple of things. A court would begin by looking at whether or not the parents put together an estate plan. Presuming they did not, which is very common, the state will determine who raises the children. The rules the court uses to make this determination will vary depending on the state. In Pennsylvania, the court will use a legal theory referred to as the “best interest of the children” to determine who would best raise the kids. This could be a close relative, like an aunt, uncle or grandparent, or a family friend.

The next question involves finances. In Pennsylvania, as is true in most states, the estate will transfer to the children. If parents have a substantial estate, the court will likely name someone to manage that estate on the child or children’s behalf. This could be the child’s guardian or another individual.

What if I want to have control over the answers to these questions?

Parents who are unsettled by the prospect of the court making these decisions can take matters into their own hands. An estate plan can use many different tools to better ensure the parent’s wishes are met. A will could include a guardian designation, naming who the parents wish to raise their children.

The estate plan could also include a trust. This legal tool would help to manage the money on behalf of the children in a manner you, and the named trustee, deem appropriate. Although the trustee is the individual or institution that is actually in charge of administering the trust, you can help write the rules that guide the administration process. Perhaps education is important. You could have additional payments available to cover the cost of attending a private school or higher levels of education.

At the end of the day, when parents put together an estate plan, they get to have more control over how these questions are answered.