Creating an estate plan is important for everyone, but people with children under the age of 18 have additional things to consider. If you have minor children, there are several ways you can use your estate plan to protect them if you pass away while they are still minors and provide for them after they become adults.
Appoint a guardian in your will
A will is not just used to pass your assets to your beneficiaries after you pass away. You may also name a person 18 or older and who is of sound mind to be your child’s legal guardian if you and your child’s other parent pass away. Many people choose to name family members, friends, a stepparent or another trusted adult.
As you choose someone, consider whether you would like your children to continue living in the same area and going to the same school and whether the guardian you choose would be willing to stay in that area. You should also consider your child’s age, health, and specific needs, and make sure that the person you choose would be able and willing to handle the responsibility of caring for your child for as long as necessary.
Create a trust for your children’s inheritance
Minor children typically are not mature enough to handle a large sum of money. That is why many parents put aside money for the child in a trust and attach stipulations to the trust (e.g., money must be used for college or money cannot be accessed until the child turns 25). The parent will then select a trustee to manage the trust and to release the money to the child when they reach 18 or the age you have chosen.
Pass your assets down through the Ohio Transfers to Minors Act
If you choose not to create a trust, you may pass your property to your child through the Ohio Transfers to Minors Act. You can select a custodian, who will manage the assets until the child reaches the age you choose (age must be no higher than 25). Once the child reaches that age, the child would receive your gift.
If you have minor children, it is essential to use wills, trusts, and other estate planning tools to make sure your children are properly cared for if you pass away.