While Estate Planning might seem like something your parents did when they were “old”, there can be major consequences for young parents who fail to do so before it is too late. If you have minor children, estate planning is one of the most important steps you can take to protect your family. Without having a plan in place, your little ones could face major upheaval and uncertainty, forced into court involvement, and witness family members fight over them.

One of the primary reasons all parents of minors should have a Will is to nominate a guardian for their children in the event something happens to both parents. If, for any reason both parents become unable to care for the children, a guardian steps in to that role and if you have not named who that person should be in your Will, then you leave the decision to a Court. While a judge will be guided to act in the best interests of the children, without your actual input, the Court may not choose the people you would have chosen. This may lead to family disagreements during a time that will already be substantially difficult on the kids. Naming a guardian in your Will ensures that these problems would be avoided, and that your wishes are put into action when it matters most.

Parents of children with disabilities should also be especially prudent about setting up an estate plan. Many disabled children rely on government benefits such as Supplemental Security Income (SSI) and Medicaid. If both parents pass away without having any sort of plan in place and funds are then distributed to the children under the laws of the state of Maryland, then in most cases, those funds will be considered an “available resource” of the child and will likely jeopardize the child’s further eligibility for necessary benefits. By having a properly drafted estate plan that leaves assets in a supplemental or special needs trust, this allows the parent to be able to leave significant sums to their disabled child that can be used for a variety of the child’s needs, while preserving access to the child’s receipt of government benefits.

If you already have an estate plan in place that protects your minor children, there are additional planning strategies that may suit additional needs you have for your children’s financial needs. For example, 529 College Savings Plans offer tax-advantaged savings for education expenses and can be an excellent way to prepare for future educational costs. Likewise, many parents and grandparents have set up separate Trusts for children/grandchildren during the child’s lifetime. These Trusts can hold gifts and investments, protect assets, and once the child reaches a particular age, they can share in the decision-making process and build their financial prudence skills.

Estate Planning is more than simply distributing assets when you pass away — for those with minors, it is a necessity to ensure that your children are protected in the event of the unexpected. By having a Will that nominates a guardian or putting documents in place that protect a disabled child’s inheritance, your efforts in proper planning will ensure that your children will be cared for as you would have wanted. If you have minor children and you have not updated your estate plan, now is the time to act.