Estate Planning with Young Children: The Problems

Individuals and couples with young or teenaged children face unique hurdles in estate planning.  In truth, many of these considerations apply equally to individuals with children who perhaps have reached the age of majority (eighteen years in Missouri), but are still not fully independent.  At issue are matters ranging from guardianship to financial support to important potential tax-related considerations.  When these matters are adequately addressed, together with the many other more general estate planning considerations, a life and estate plan can be created that assures that a family’s needs are met, their children are supported and cared for and unnecessary taxation is avoided. 

Each family situation (and particularly those involving young children), is truly unique, from both a financial and personal perspective.  Accordingly, life and estate planning for each family is unique and an estate plan must be crafted to fit the situation, needs and desires of a particular family. 

THE ISSUES: UNIQUE CONSIDERATIONS FOR MINOR CHILDREN

1.  Legal Guardianship.

 As every parent of a minor child has surely asked themselves, “Who will take care of the kids if something was to happen to me (or us)?”  If this issue is not addressed directly, a court will determine the most appropriate individual to assume guardianship of children.  As might be expected, this can result in difficult disputes among surviving family members and an emotionally traumatic experience for children, and ultimately it may result in guardianship granted to an individual or couple whom the parents would not have selected or approved. 

2.  Legal Minority: Inability to Own and Control Property.

Individuals under the age of eighteen cannot own property and cannot undertake many of the tasks associated with property ownership.  Regardless of the very obvious concerns of actual maturity and experience, this legal limitation of minority creates very apparent hurdles for families with younger children. 

In the event that property is transferred to children as part of an estate plan, without further clarification or planning, a court-appointed conservator would be designated to hold the property.  While this indeed offers some actual protection to the child’s eventual legal right to the property, it creates some very difficult and problematic issues with respect to control and desired use of the relevant property.  

3.  Immaturity.

In addition to the legal incapacity of a minor child to own and control property, there are very practical concerns with a young person’s lack of experience and their likely financial, emotional and social immaturity.  

Where proper planning has not occurred, a probate conservatorship would be created, as discussed above.  However, once the youngster reaches the ripe age of eighteen years, they will actually get the property—perhaps an even worse outcome than the conservatorship.  This generates numerous concerns due to the child’s general immaturity, their likely susceptibility to undue influences and their station on life.  Many children of this age are yet to even graduate from high school, much less prepared to prudently use any amount of significant money or property.

4.  Maintenance and Needs Associated with Child Rearing.

As every parent understands, the cost and effort to raise children is tremendous.  To state the obvious, children are not self-reliant or self-supportive.  Accordingly, in the event of a parent’s death (or incapacity) there must be in place a means of providing for the needs of their children.  These needs often include daily maintenance, health care, educational and recreational expenses, and college tuition).