How Much Will Your Child Pay in Fees?

For most young families who make a Last Will and Testament, one of the most important and difficult decisions is naming a guardian for their minor children in the event both parents perish. Other young families simply do not get around to making their wills, leaving the selection of a guardian for the children up to state law and a judge.

Even when a Last Will and Testament has been made naming a guardian for the minor children, is that enough? The law requires the guardian to file yearly accountings of the assets, and in most cases to obtain a court order before money is spent. Both actions generate legal fees. Over a period of years, the amount could be substantial. In addition, the guardian is entitled to fees. Then when the child becomes an adult at age 18, all assets are transferred to the child to manage on his/her own.

Parents gaze at their newborn child and see a future president of our country. Every 3-year-old is a budding genius. Then one day you look at this gangly opinionated teenager in your house and wonder if the hospital gave you the wrong baby to bring home. For even the most responsible of teenagers, managing your entire estate is an overload of responsibility.

There is an alternative. In your will you can establish a trust that only takes effect in the event your children inherit from you, a testamentary trust. A trustee is named to manage the assets. You specify the terms of how the money shall be spent as well as the ages for distribution to the children. So you could provide that the funds are distributed half at age 25 and the balance at age 30. Or you could provide that it is distributed after the youngest child is a certain age if you are worried about paying for college for all of them. You set the terms for distribution that you believe meet the needs of your children. You know them better than anyone. If you plan for all of the assets to go into this trust, you reduce the legal fees connected with a guardianship. In the event you are divorced from the child's mother or father, the trust also keeps your funds away from the control of the ex-spouse.

Take a look at your life insurance policies. Have you named a minor child as a beneficiary? If so, the insurance company will require proof of guardianship before releasing the funds. If you establish a trust, you would name the trustee and identify the trust as the policy beneficiary.

Whenever a minor child receives $15,000.00 or more, Florida law requires that a court guardianship be opened. But if a trust to benefit a minor child receives the funds, they do not go into guardianship. If both parents are deceased, a guardianship of the person will be required to authorize the guardian to give consent for medical treatment and other items. But by using a testamentary trust, transfer of assets can be postponed beyond age 18, and the legal expense greatly reduced. You must act now to avoid your child acquiring a guardian of property should an accident cause your premature demise. Contact a Miami Guardianship Attorney today to find out more!