As a parent—or a grandparent, relative, or close family friend—you want to make sure the children you love are cared for and protected. But, good intentions aren’t enough. Proper planning is critical. Even the most thoughtful gift can lead to confusion, delays, and unnecessary costs if given without smart estate planning.

Here are two common mistakes families make when planning for minor children and our recommendations on how you can avoid these mistakes with thoughtful, strategic planning.

Mistake #1: Relying On A Simple Will

Many families assume that naming a guardian in a will is enough. It’s not. While a will can name who you’d like to raise your child, it doesn’t allow that person to automatically manage the child’s inheritance.

Here’s what really happens:

• The will must go through probate.
• A court will appoint a guardian, typically the person named in your will, to raise your child.
• The court, not the guardian, will control any assets left to the child.
• Once your child turns 18 (or 21, depending on the state), the entire inheritance is handed over in a lump sum—regardless of whether the child is prepared to manage it.

For most parents, this is not an ideal outcome.

Mistake #2: Unintended Court Guardianship of the Inheritance

A court-controlled guardianship is a cumbersome and public process, similar to one for an incapacitated adult:

• Every expense must be documented and approved by the court.
• Attorneys must be involved—and paid.
• Flexibility for your child’s unique needs is limited by the rules of the court.

This process can drain financial resources and add stress to an already emotional time.

Choose A Better Way: Create A Trust For Your Children

Instead of leaving assets directly to a minor child through a will, consider a testamentary children’s trust or, even better, a revocable living trust:

The benefits of a testamentary children’s trust (through a will):

• Allows you to name a trustee to manage the inheritance.
• Gives you some control over when your child receives the inheritance.
• However, the trust doesn’t become effective until after probate is complete, causing delays, additional costs, and public exposure.
• This type of trust will not help if you become incapacitated.

The benefits of a revocable living trust (our recommendation):

• This is the most flexible, comprehensive option for families who want to protect their children now and in the future.
• It avoids probate entirely, so long as assets are properly aligned with your trust. Assets are managed privately and efficiently.
• This trust works during your lifetime. If you become incapacitated, the trustee you choose can immediately step in.
• It protects your children’s inheritance from irresponsible spending, future creditors, and even divorce.
• This trust is tailored to your values. You choose when and how your child inherits, and you can provide guidance every step of the way.

Add A Personal Touch: A Letter Of Intent

The best way to protect your children is with a revocable living trust plus a letter of intent. Your letter of intent captures your wishes, values, and instructions for how you’d like your child to be raised, educated, and supported.

We encourage every parent to include a letter of intent with their estate plan. It’s one of the most meaningful gifts you can give. 

Here’s our gift to you: download the JM LAW letter of intent template here.

Don’t Forget Your Young Adults

If you have children who have recently turned 18, they’ll need something different to protect them. There are five legal documents every young adult needs. Without these documents, you will not be legally allowed to step in and make decisions for your young adult children—even in an emergency.

Being a parent doesn’t stop when your child turns 18. Your legal ability to protect your child shouldn’t stop then, either. To protect your child, call us at (703) 956-5738 or contact us. We’ll schedule a 15-minute discussion to answer your questions and start the process.

This post was created by Avatus Stone, COO & estate planning strategist at JM LAW, PLLC.