PLANNING FOR THE FUTURE

PLANNING YOUR ESTATE FOR THE BENEFIT OF CHILDREN OR MINORS

While becoming a parent is glorious, it is a life transforming experience that changes one’s perspective about life. You suddenly realize that you have a new purpose to fulfill in life.

Even though a number of parents desire a better and more secure future for their children, parents need to consider the possibility that they may not always be around for their children. Therefore as a parent or guardian, you should secure your child’s or ward’s future by having a proper, tailor-made Estate plan in place for them. The African extended family system which we used to support a bereaved child or minor is now mostly dysfunctional or non-existent.

Why Bother planning Your Estate For Your Children Or Other Minors?

It is natural as parents to simply assume that in the unlikely event that one of the couple becomes incapacitated, the spouse would automatically assume the responsibility to care for the children or alternatively that their extended family would step in and everything would be okay.

Though this may seem logical, chances are that this will not always be the case. What if the surviving partner decides to take another partner or re-marry? What if there is a child with special needs that a single parent may not be able to handle? You may also have special plans for your children that  your absence may jeopardize.

It is also obvious that the comfort or attention that a child would receive from a single parent would likely be less than he or she would receive when both parents are around. There is also the unlikely, but probable coincidence that both parents may die together. Diseases and accidents do happen.

What planning your Estate for your children involves

The first thing that often comes to mind with children is their education. You may want to take provision to ensure that your children’s education is well taken care of through an estate planning instrument you adopt.

However one must not forget that your child needs a good home to enjoy a proper education and fulfill his/her potential. It is therefore necessary that you provide for the person who would take over the custody of your children and also include an alternative guardian just to be on the safe side. Where both parents become incapacitated and have not appointed a guardian, it is up to a court to appoint one for you. This might not be an attractive option.

You may also have investments or assets that you want managed for the benefit of your children, wards or other minors. It is thus necessary that you provide in your Estate Plan for a person or entity who would manage those assets until your children reach the age of maturity.

You should also think twice about bequeathing your children with a lump sum when they come of age. Most young men for instance may not be capable of managing sudden millions rationally. You therefore have to provide a schedule of how those assets or investments are transferred absolutely to your children. According to Warren Buffet, you should leave “enough money to your kids so that they can do anything, but not enough so they can do nothing.

How to plan your Estate for your Children

There are multiple ways by which you can plan your Estate for your children. We will only discuss a few at this point.

A Will with provisions regarding your children is an obvious example. You could also provide a Trust with Funds that may be detailed to provide for your children’s education or certain special needs. Buying Life Insurance is certainly a good and cost effective way to fund your Estate or the Trust Fund that your create.  You might also want to consider purchasing assets jointly with a child (particularly when they are much older). This allows the illegal principle of survivorship to vest such assets in your children once you pass on.

Whatever choices you decide on, make sure you consult credible professionals when it comes to planning your Estate for children or minors. Do not take chances with your children’s future.