Estate Planning for Divorced Parents with Minor Children
As your family grows, changes, and becomes more complicated, your estate plan must grow and change with it. If you have minor children and divorce your spouse, you need to pay careful attention to your estate plan after the divorce. You should have two main estate planning concerns: guardianship and inheritance.
Guardianship involves determining whom you would like to care for your children if you are unable to care for them yourself because of your incapacity or death. The guardian will be responsible for providing your children with food, shelter, support, and education. Guardianship also concerns visitation of your family should you die before your former spouse. For the benefit of your children, it is important to sit down with your former spouse to develop a unified plan for guardianship. Typically, parents will designate one another as the guardian of their children. Barring extraordinary circumstances, the other parent is usually granted guardianship under state law in the event of the disability or death of a parent.
Inheritance concerns what assets your children will receive from your estate after you die, as well as how they will receive the assets. Typically, a parent will appoint the guardian to manage any funds left to the children. If you are concerned that your children’s guardian will not be able to manage the funds appropriately, consider setting up a revocable living trust to hold your children’s inheritance. In the terms of the trust, you can designate that the trustee use the funds only for specific purposes that benefit the children, such as education-related expenses. You can also designate that the funds be paid out only to the institutions providing the services to the children, rather than to the guardian directly.