Estate Planning Concerns Involving Children
College Financing | Appointing Guardians | Inheritance
Children are especially vulnerable in the event of death or incapacity of a parent. Prudent estate planning demands that their interests be specifically and thoroughly addressed in creating a will, power of attorney, or a trust.
Jennifer C. Rydberg is a Kent, Washington, estate planning lawyer serving the Seattle and King County area since 1978. She invites clients to schedule a consultation at 425-988-6574 / 866-213-7556 to discuss their wishes regarding minor children.
Issues Involving Children
Because they do not have independent legal standing until age 18, the impact on minor children must be considered in all aspects of estate planning. Young adult heirs over 18 are particularly financially vulnerable and should be protected by your estate plan.
Guardianship -- To help avoid costly and possibly traumatic custody proceedings in the event of your death, your legal will should designate a legal guardian for minor children. It could be the same person for all your kids, or a different guardian for each individual child. You may choose to have your child cared for, and their money managed, by the same person or by different people. Ms. Rydberg advises clients on choosing an appropriate person.
Non-Parental Custody -- If your child is orphaned, do you want to allow for third-party custody and/or adoption by a grandparent, stepparent, or other relative?
Wills, Trusts, and Powers of Attorney -- If minor or young adult children are designated as beneficiaries in your will, how will they inherit? Revocable living trusts avoid probate under Washington law; however, testamentary trusts do not. Ms. Rydberg can draft your will and trust provisions stipulating how assets can be used (e.g., education, welfare, support, or health care), and at what age the child will be able to access the funds. Powers of attorney should specify who will make educational, health care, and other important decisions regarding your children when you are unable to do so. Powers of attorney are not in the will, and the authority granted by a power of attorney stops upon death.
College Savings Plans -- Ms. Rydberg is knowledgeable about different methods for funding college education. The following methods avoid federal, state, and local taxes:
- A 529 college savings plan (named after an Internal Revenue Code 529) allows tax-free growth of contributions set aside for college expenses. The parent or grandparent maintains control of the plan, but its assets can only be used for higher education for the beneficiary child. The investment works similar to a 401(k) or IRA.
- A 529 prepaid tuition plan, also called a GET Plan (Guaranteed Educational Tuition Plan) allows parents (or grandparents or any contributor) to pre-purchase tuition credits at current rates, locking in a college education at today's price. The plan is guaranteed -- paying for half a year's worth of tuition now would cover a half year's tuition at a state college 10 or even 20 years in the future.
To discuss legal issues regarding the future well-being of your minor children, alone or in the context of a comprehensive estate plan, contact Jennifer C. Rydberg at 425-988-6574 / 866-213-7556 to schedule a consultation.
