MSU Extension discusses estate planning for parents with minor-aged children
Parents should make sure they have arrangements in place for the care of their minor-aged children when planning their estates, according to Montana State University Extension.
To make sure parents’ wishes are followed, Marsha Goetting, MSU Extension family and economics specialist, and Wendy Wedum, MSU Extension family and consumer sciences/4-H agent in Pondera County, suggest parents create a will that names a guardian and a conservator in case both parents die.
A guardianship provides for the care of the children until age 18 and grants the power and responsibility of a parent. A guardian makes decisions about a child’s upbringing, schooling and medical treatment. A conservatorship provides for management and distribution of money, property and assets left to children until they are 18. One person can perform both roles, or separate individuals can be named guardian and conservator.
“Often the most difficult decisions parents face is agreeing who they want to have the responsibility of raising their children and managing their money,” Goetting said. “Parents usually choose someone whose values, lifestyle and child rearing beliefs are like theirs.”
Goetting added that discussing the issue with older children is wise because Montana law allows youth ages 14 and older to request a court to appoint a guardian other than the person named in parents’ wills.
Goetting and Wedum said that attorneys recommend parents nominate a backup guardian and conservator in case their first choices aren’t able. Parents should also reevaluate their choices periodically.
Montana law says that when children reach age 18, they receive the property that was in the care of a conservator, regardless of their capability to manage it. A more flexible alternative to a conservatorship is leaving assets in a trust.
In their wills, parents can indicate which assets pass directly to the trust, also known as a testamentary trust. That can include life insurance payments, funds from checking accounts, stocks, bonds, or other funds.
“Parents can prepare a trust agreement giving their selected trustee the power to manage the trust assets and use the income for their children’s benefits,” Wedum said.
The trust agreement becomes effective only upon the death of both parents. The agreement states how parents wish the money to be spent, who the trustee should be, and when the trust terminates. The trustee must follow the parents’ directions for health, education and support of the children as outlined in the agreement and writes checks for the trust account for the children’s living expenses, education and other costs.
More information about estate planning for parents with minor children and revocable living trusts is available in MSU Extension MontGuides and online at http://www.montana.edu/estateplanning/eppublications.html. For those who do not have computer access, copies are available from county Extension or reservation offices.