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!