No Oklahoma parent wants to think about leaving a child in the world without parental guidance. That said, none of us knows what the future holds, and parents have an obligation to plan for the worst, even while hoping for the best. In terms of estate planning, parents should give careful consideration to whom should be designated as a child's legal guardian in the event of the death of one or both parents. Once that decision has been made, trusts should be the next step in the planning process.
A trust allows parents to set up a plan for the unlikely event that they predecease their children while those children are still minors. Trusts can be structured in a number of ways and funded with a wide array of assets. For example, a trust that is set up with the sole purpose of providing financial support for one's minor children can be funded with cash, investments and life insurance. The person designated as guardian for the child or children can also be given responsibility for managing the trust, or that role can be filled by another party.
In addition to providing funding during a child's years as a minor, trusts should also outline what is to occur when the beneficiaries reach the age of maturity. Many parents do not feel that 18 is an age at which children are ready to make serious financial decisions, and they postpone large disbursements from a trust until a later date. Another option is to tie disbursements to achievements, such as covering the cost of college, helping to fund a down payment for a home or putting toward a business venture.
Trusts offer a high level of flexibility and give Oklahoma parents a range of choices in creating financial stability for their children. In the case of a revocable trust, the entire entity can be broken down or restructured once all children reach adulthood, and the assets held within can be put to a different estate planning use. Flexibility is one of the most appealing aspects of trusts, and one that parents find helpful when creating a plan to care for their kids in the case of an unexpected loss.
Source: thespectrum.com, "Estate planning important when children, grandchildren are involved", Scott Halvorsen, Sept. 27, 2015