By: Sarah Stewart Legal Group
Sadly, not many parents have thought about what happens to their children when they pass away. Understandably, most of us don’t like to think about death and think we have all the time in the world to plan. We can’t imagine a tragedy that takes us from our children before they’re adults. But, unfortunately, it can, and does happen. We’re only a freak accident away from our own mortality.
So, if you’re a parent, it is important that you prepare for the worst and hope for the best. If you do not have an estate plan in place, your assets will pass by what is called the law of “intestacy.” Intestacy is a law where the state determines who gets your assets and how they are split. Under this law, the spouse gets a portion, and the children get a portion and so on.
So, what happens to the children’s portion if they are under the age of 18?
Children Inherit Outright
If the children are receiving assets outright, the other parent, or a Guardian appointed by the Court will care for the property. Though the Court will have some oversight of the assets, Guardians will manage the property and can receive money for costs they have for their duties. Also, the Court oversight itself can be costly. These costs usually come from the child’s assets.
Though the assets will pass to the child when he or she turns 18, depending on his or her age, many assets can be eaten up by court and guardianship costs alone before the child receives the assets. When the 18 year old receives the assets, there is no longer oversight of how they are used. You, and the Guardian, have no say over their actions.
For additional oversight on the assets and a chance to ensure your children use the funds properly, families should consider starting a trust.
Children Inherit Through a Trust
The best way to protect your children’s inheritance is with a trust. In the trust, you will name a Trustee to manage the children’s assets until they reach an age you choose. Trustees are required to act in the best interests of the children.
This is an especially good option for blended families because the parent from the previous relationship will not have full management of the assets, the Trustee will. You can be as broad or detailed as you would like in restricting the assets. You can give them all to the child at a certain age, or require the funds only be used for certain reasons. You have total flexibility.
You will also name who you would like to act as Guardian and care for your children if you and the other parent are gone. This lessens the chances your family members will fight over your child in Court, or your child will wind up in custody with the Oklahoma Department of Human Services if both parents die.
As parents, it is our duty to protect our children and their interests. Take some time today to sit down and decide what that looks like for you and your family.