What Happens to Your Kids if You Die Without a Will?

If you are the parent of minor children, one of the most important reasons to have an estate plan is to provide for your kids' care after your death. If your children's other parent survives you, that person will be responsible for their care - but not necessarily for managing anything they inherit from your estate. Without an estate plan that appoints a guardian for your children and a trustee to manage their inheritance, the court will step in and appoint individuals to do both. But you will have no say in who those individuals are.

If you die without naming a guardian for your minor children, and their other parent is not still living, the court will name a guardian. The first choice under the law in this instance would be the children's grandparents (that is, your parents or your co-parent's parents). If there are no grandparents, or any grandparents are unwilling or unable to take responsibility for the kids, the court then turns to the next closest kin. Typically, that means aunts and uncles - the parents' siblings. Among these various relatives, the court has discretion to choose the person based on the judge's estimation of the children's best interests. But the judge won't know your kids or your family the way you do. Any number of nightmare scenarios could result:

• Maybe your parents are getting on in years, and aren't really capable of caring for young children any more. Or maybe you promised yourself that you'd raise your kids differently from the way your parents raised you.
• Are you comfortable with your inlaws (or maybe ex-inlaws) raising your children?
• What about your brother who, in your opinion, drinks too much or is drowning in credit card debt? Will the judge be aware of that?  
• Maybe your extended family doesn't get along. If more than one relative wants to serve as guardian, your kids could be at the center of a prolonged, expensive court battle.
• What if you don't have close relatives to serve as guardians? Then the court will appoint someone else - but who will that person be? 

These are just a few of the situations that can result when the court has to appoint a guardian for your kids. And you can avoid all of them by having an estate plan that designates a guardian of your choosing.

A child younger than 18 cannot inherit property in her own name. Nor can she receive outright the proceeds of a life insurance policy under which she is the named beneficiary. If you die intestate and your minor children inherit property from your estate, or receive life insurance or similar funds, the court will appoint a guardian of the estate to manage this property in their behalf and for their benefit. This person can be, but is not necessarily, the same person appointed as guardian to care for your children. In fact, although a surviving parent will automatically have custody of the kids after your death (meaning no guardian of the person needs to be appointed), that same parent is not automatically the guardian of your kids' estate. The court must still appoint someone.

The guardian of a minor child's estate owes that child the highest duty of care and loyalty to manage that estate for the child's benefit. Of course, you would want your children's inheritance to be used for their care and education. But do you really trust an appointed guardian to do that? Again, consider your extended family fighting for the opportunity to manage your kids' money. Also, consider this - guardianship of your children's estate ends when they turn 18, which means they are then in charge of their own finances and property. Will they be responsible enough at such a young age?

With an estate plan, you can create a trust for your kids and designate a trustee. You can specify how trust funds and property are to be used, and you can decide when the trust terminates and your children receive the funds outright. But without an estate plan, you're at the mercy of the courts.

If you have not yet created an estate plan, or if you have one you'd like reviewed and potentially updated, I can help. My goal is to find out what's most important to you, and make sure that's reflected in your will. Call me today at (903) 944-7537 for a consultation.