Documents Parents of Minor Children Should Have in Place
As a parent of small children, there are a number of documents that should be prepared to protect your children’s physical and financial well-being in the unlikely event you are not available or are deceased. Four of the most essential documents are detailed below.
Designation of Guardian of the Person and the Estate. In the unlikely event of the death of a couple with minor children, guardians of the person and guardians of the estate should be nominated. The guardian of the person controls the physical whereabouts and well-being of the child. Typically, people designate as guardians of the person either family or close friends who have children or would otherwise be able to provide a safe and comfortable living environment for the children. The guardian of the estate controls the financial resources and monetary expenditures of the child. With respect to the guardian of the estate, typically, it should be an individual who has sufficient financial expertise to adequately manage the child’s assets. This can be done in a separate document or in the parents’ Will.
Medical Consent Form. To the extent that your children will be left for extended periods of time with a friend or caregiver, a letter of medical consent granting the individual taking care of your child should be made giving the authority to obtain medical care and assistance if necessary. The consent should include the authorization under the recent “HIPAA” laws for the caretaker to discuss the medical condition with the health care provider, as well as have a copy of your insurance card.
College Education Planning. Whether your child is in preschool or is a high schooler, the costs of a college education are continuing to spiral. This can be addressed in a trust created for your child (discussed below) or in a separate savings vehicle, such as a 529 plan.
Planning for a Child’s Financial Well-Being. In the event of the death of both parents, a mechanism must be in place to financially support the child. This is best typically accomplished in a trust that directs an individual or corporate fiduciary named as trustee to make distributions for the child’s health, education, support, and maintenance needs at least until adulthood. In the absence of such a document, in Illinois when assets are distributable to a child in excess of $10,000, a guardianship estate must be created in the county court where the child resides. This is a cumbersome procedure whereby the guardian of the estate is required to hire a lawyer to present and have approved annual accountings. In addition, no distributions may be made without court order. With a trust, the trustee steps in and makes these distributions to or for the benefit of the child. Typically, the guardian of the estate (discussed above) is named as trustee, however, some people prefer to name different individuals as a check and balance. In addition, the guardian of the person (discussed above) who is entrusted with the physical well-being and care for the child does not necessarily have to be named as trustee either.
More information is available from Melanie Witt at 312/ 840-7041 or email@example.com.