When young adults in Minnesota think of estate planning, they may envision themselves executing a will or trust after they have reached an old age and have accumulated a lifetime of assets to pass on to their heirs. Some may have even given thought to what end-of-life care they want through a health care proxy, and who they want making decisions on their behalf should they become incapacitated. However, estate planning isn’t just for the old. Even young adults can benefit from executing a comprehensive estate plan. New parents especially should take into account one aspect of estate planning: naming a legal guardian and trustee for their child.
It’s not a pleasant topic, but new parents should keep in mind the possibility that they might both pass away before their child is a legal adult. To prepare for this possibility, they can decide on a guardian who will have custody of their child in such situations and a trustee that will manage the child’s financial affairs.
Guardians make the day-to-day decisions regarding raising the child. When a court names a guardian to a child, they will do so based on the child’s best interests. If the parents had selected a guardian, that preference will be given some weight (although the court can choose someone else if it deems necessary).
Trustees have the authority to handle the child’s financial affairs. For example, the trustee pays bills, submits income tax returns, makes investments and takes care of any distributions the child is owed. The court, in general, must honor a parent’s choice of trustee. Moreover, while a guardianship ends when the child becomes a legal adult, a trustee can oversee a child’s financial affairs even after the child is an adult.
Selecting a guardian and trustee for your child is a big responsibility. However, many parents might have very firm ideas about who should fulfill these roles. By executing a will and trust naming a guardian and trustee, parents can rest assured that their child will be in good hands should they both pass away before the child is grown.