In Colorado, if parents are unable to care for their own children and they have not nominated a guardian the probate court will decide who shall raise the children. Parents can select who will care for their children in their place by nominating a guardian in their Last Will and Testament. The surviving family can enjoy peace of mind knowing that the parents’ wishes are met for who will care for the children (“guardian of the person”) and who will manage assets the parents leave to their children (“guardian of the property”). Parents may choose the same or different people for these roles. Establishing a guardian of the property is important, even if the parents set up a trust, because the children may receive non-trust income while minors. For example, a wrongful death lawsuit against the party responsible for the parents’ death.
Parents must ask themselves:
Parents must discuss these issues with each other and ask a guardian before appointing one. It is also wise to appoint a back-up guardian.
Parents should also appoint a health care surrogate in case they should become either permanently or temporarily unable to make these decisions for their children. For example, if the parents are traveling for work and their child is hurt, the surrogate can make medical decisions in the parents’ place if the parents can’t be reached. These decisions could include giving any type of health care, such as surgery, life-prolonging care, and organ donation. Just as with the guardian, parents should carefully consider the trust issues associated with the role of health care surrogate. Parents should select only a person to serve as health care surrogate who will make decisions that align with the parents’ wishes.
Leaving assets in trust for the children allows parents to choose who controls how their assets are disbursed without the need for court intervention (as required by a Last Will and Testament). The parents may choose to distribute the assets once a child is 18 years old, or set a different timeline or other conditions for the trust.
By placing assets in trust, the parents reduce the chances of other relatives unduly influencing the children since the trust is under the control of the trustee.
Please contact Mile High Estate Planning today to learn more about planning for your minor children.