Having an up to date Will can be crucial to achieving your estate planning goals.
One of the most important things a Will can do after naming the person(s) who will raise your children, if you die before your children are adults, is to name the person who will handle money you leave to your children if you die before your children are adults.
Often the best way to handle this is to create a testamentary trust.
A testamentary trust is a trust that is contained in your Will (“testamentary trust,” as in Last Will and Testament). A testamentary trust for children is funded ONLY if you die before your children become adults, or before they reach the age when you think they will be financially responsible.
A testamentary trust is often valuable because it continues to safeguard the money beyond the time your children turn 18. Many people feel that an 18 year old should not receive their full inheritance the day they turn 18, since they fear that an 18 year old might spend the money unwisely.
In such a case, having a testamentary trust can be helpful. A testamentary trust can keep the money in a trust that can be used for education, or to purchase a house, or start a business, or the like, if the trustee feels the plan for the use of the money is wise, while protecting the money from impetuous actions of a young adult until the young adult reaches an age that the parent feels is sufficient that the child will be responsible.
A testamentary trust can also save on the expenses needed to start a conservatorship, and on the expenses of reporting annually to the court and otherwise managing the conservatorship.
If a parent decides that a conservatorship is better for some reason, though, of course, a Will can also establish who the parent thinks should be the conservator for their child until the child reaches 18.
A trustee or a conservator handles the money and other assets of a minor (or, in the case of a trustee, a person who is over 18, but below the age when the parent thinks the child should have access to their inheritance).
A guardian looks after the child himself or herself.
Sometimes it is wise to have the same person serve as guardian and as trustee or conservator. Other times it is better to split these roles, so that one person handles money issues, and the other actually raises a child.
A Will can be very important in allowing a deceased parent to speak to the judge, and make his or her wishes known as to who should be the guardian, and who should be the conservator or trustee.
Without a Will, a parent has no real way of making his or her wishes known to the court, and the court is likely to appoint a close relative to these positions, even if the parent would prefer someone else to be appointed. Similarly, without a Will, the court has no way of telling which close relative a parent would have preferred, even in a case where the parent may have very strong feelings on the matter.
Steven A. Heinrich
Divorce & Custody
Wills, Guardians & Elder Law
- Wills, Trusts, and Probates
- Guardians and Conservators
- Elder Law
- When Should You See An Elder Law Attorney
- Substitute Decision Makers
- Overview of Guardianships, Trusts, and Health Care Documents
- Finances and Business
- Health Care Documents
- Guardianships and Conservatorships