What will happen to your money when you pass on? That may be a very long time from now, but it’s never too early to think about. Generally parents will leave everything to one another, and if something were to happen to both parents, the children get it all.
Parents with younger children typically choose someone to care for their children if they were to die prematurely. They’ll ask a Godparent, close relative or friend to care for their children if something should happen – and then they stop at that point.
It is critical you consider everything, and not just who will look after them. You should carefully determine the management of any money or property your children may inherit from you. Who is going to manage the inheritance until they reach adulthood? That same relative or Godparent? Have you left explicit instructions in a will or a living trust?
Do you even have a will or a trust?
Your property (the inheritance) will be decided by a probate court if you haven’t left a will or trust, and your children may have a court-appointed “property guardian”. Is that Godparent or relative careful with money? Would they protect the inheritance, invest it? Lose it?
In a will, you can designate a property guardian for your children or you can choose a custodian to care for the inheritance until your child reaches adulthood. You may know someone other than the caregiver who would be a better choice for handling the inheritance.
You can also set up a trust for each child, with a trustee. The trustee would be someone you appoint and have confidence in who would handle the inheritance in the manner you wish. You can leave instructions as to allocating the funds. For instance, you may want your child to continue piano lessons or go to college. The trust would dole out the money to pay for those lessons or tuition – per your instructions.
You can also set up the trust to distribute the assets at intervals. Typically, this is set up for a child to receive one-third the estate when they turn 25 years old, another one-third at age 30 and the last third when they’re 35.
If your children are adults, talk to them about what you have set up in a will or a trust. You don’t have to go over every detail, but let them know where your important papers are kept. If you are equally dividing your estate to more than one child, don’t make one the executor over the other child(ren). You will minimalize any fighting that may occur if both, or all children have equal say-so too.
If you have a life insurance policy, make sure all children are named equally as beneficiaries. There are parents who leave a life insurance to the most responsible child thinking that child will divide the money equally. What a huge mistake!
If you have certain items such as art, jewelry or family heirlooms, leave a list of who gets what and put that in your will or your trust. Direct Wills Trusts Surrey are professional Will writers who will help you write your Will the way it should be written – to protect you, your asset and your children.