Planning Issues for Parents
A Parent’s Guide to Planning for the Unexpected
For parents, planning for the future is not just about managing assets; it’s about protecting your children. Whether you are single, married, or divorced, creating a clear legal plan is one of the most important things you can do to provide security and direction for your children if you are no longer there to care for them.
The Two Most Critical Questions Every Parent Must Answer
If the unthinkable were to happen, a court would be forced to make two life-altering decisions for your children unless you have provided legal instructions. Your plan must clearly answer:
- Who will raise my children? This involves naming a legal guardian. Without your written instructions in a will, a judge who does not know you or your family will make this decision.
- Who will manage their inheritance? The person who raises your children is not automatically the person who manages their money. You must name a trusted individual or institution to be in charge of their finances.
The Right Legal Tools for the Job
A comprehensive plan uses specific legal tools to answer these questions and provide protection.
- The Foundational Will: Your Last Will and Testament is the only legal document where you can name a guardian for your minor children. It is the absolute, essential starting point for any parent.
- The Power of a Trust: For many families, a trust provides a much higher level of control and protection. Instead of receiving their entire inheritance in a lump sum at age 18, a trust allows you to appoint a trustee to manage the funds. You can set specific rules for how the money is used—for education, a first home, or other life milestones—ensuring the funds are used wisely. A trust also avoids the public and costly process of probate court.
Special Considerations for Your Family Structure
- For Single Parents: A robust plan is especially critical for single parents, who may lack a built-in support system. A trust can provide a clear structure for a chosen sibling or parent to step in and manage your child’s inheritance with clear instructions.
- For Divorced Parents: If you are divorced, your ex-spouse will likely have custody of your children, but you may not want them to have sole control over the inheritance you leave behind. A trust allows you to name a co-trustee (a trusted sibling or a professional) to manage the funds alongside your ex-spouse, creating a system of checks and balances.
- For Married Couples: At a minimum, a will is necessary to avoid North Carolina’s intestacy laws, which could divide your assets between your spouse and your children. It is also vital to regularly review beneficiary designations on life insurance and retirement accounts to ensure they are aligned with your overall plan.
The administration of your estate and the care of your children are too important to leave to chance. A comprehensive plan for your children’s future is an act of love that provides a lifetime of security. Call our office at (919) 256-7000 to schedule a consultation.