Estate planning is never a “one size fits all” proposition; in fact, your estate plan probably looks quite different today than it did when you began. Marriages, new births, divorces, career changes – all of these can change your estate plan and your plans for the future. One area of particular interest to most of us is how to leave assets to minor children. Most states provide specific guidelines designed to direct the way property and assets inherited by children will be handled. A property guardian is often the ideal solution. Minors cannot, as we know, enter into legal contracts nor can they assume control of property they have inherited through a will.
What is a Property Guardian?
Enter the property guardian. A property guardian, or property manager, oversees the inheritance of minor children. Naturally, the goal is to find someone who is honest and has no ulterior motives, yet has a genuine interest in protecting the minor’s rights. They should have no interest in how an inheritance plays out from a personal perspective. Of course, it is beneficial to select someone who has common sense and possibly a financial background.
The property guardian is responsible for taking care of all of the aspects related to the property. In most cases, he will be responsible for managing the property in such a way that the assets can be used to provide payment for the minor children’s living expenses, medical expenses, and educational expenses if there are any.
What the Property Guardian Is Not
The property guardian does not need to be a personal guardian; in fact, it might be advantageous to select two people: one to serve as a personal guardian if the need arises and another to serve as a property guardian; again, if the need arises. In fact, if the parents prefer, a different property guardian can be arranged for each child.
If there’s no individual who can or will fill this role, some families opt for an institution, such as a bank or other financial institution. If the parent does not select a property guardian in his will, the court will select one for the children.
When is the Property Turned Over to the Minor Children?
When the minor children become of age or enter adulthood at the age of 18, in most cases, the property is released to them. Variations to this scenario exist such as when the will includes terms dictating the disbursement of the property to the minor children. In most cases, this will involve some type of custodial account that will remain in place until the children reach the age of 21. When more than one child is involved, this means that each child will receive control of their inheritance at a different time.
Another variation is the child’s trust which allows the parent to set the age at which he prefers the child to inherit control of his inheritance.
To learn more about property guardians and how it might work in your estate plan, give us a call today.