A young couple gets married, saves some money to buy a house, then has a child. They don’t have much in the way of assets; in fact, their debt may exceed their assets. They may have a few bank or investment accounts, some life insurance, and some retirement accounts, but there is nothing of too much value, so they don’t need a will. Or do they?
Most people assume that if they die without a will, all of their property will go automatically to their spouse. However, that is not true if the individual has children. Instead, the children as well as the spouse will get a share of the property. Even worse, if a child is under the age of majority (18 in Missouri), the child is not legally allowed to own the property, and a conservator must be appointed by the court to manage the property for the child. Even if the child still has one parent living, that parent would not be automatically allowed to manage his or her child’s inheritance. The parent would need to be appointed conservator by the court. The conservator, once appointed, must post a bond with the court and get the court’s approval any time they want to make a distribution for the child from the child’s funds. These requirements are added to the conservator’s burden of filing an annual accounting with the court and paying fees to the court (and to an attorney who must be hired to help with all of the paperwork). When the child reaches the age of majority, the child then receives all of the property outright. The good news: with a will in place this entire process and cost can be easily avoided.
A parent can avoid the necessity of a conservatorship by having a will establishing a trust for the minor children. The will would appoint someone to be trustee of the trust. The trustee would be responsible for making sure the funds are invested appropriately, and for distributing money to the children, or on their behalf, as the trustee deems appropriate. There is no active court supervision, meaning the trustee does not have to get the approval of a judge before he or she can make a distribution for the child, and there are no fees that must be paid to the court. The will can designate that when the child reaches a certain age determined by the parents, the assets remaining in the trust are distributed outright to him or her. By creating a trust for minor children in a will, parents can ensure that there are funds available to take care of their children without a court getting involved.
Another reason younger parents need to each have a will is that a will allows parents to designate who they want to take care of the children if something happens to both parents. If a minor child’s parents have both died, a probate judge will appoint someone to serve as the child’s guardian until the child reaches 18. Parents can designate in their wills who they want to serve as their children’s guardian. The court will still need to appoint that person, but assuming the person designated has the resources and is willing to serve as the child’s guardian, the court will more than likely follow the parent’s wishes expressed in the will.
However, if there is no will, the probate court will be left on its own to decide who should raise the child. This could lead to well-intentioned relatives or friends fighting with one another to be appointed a child’s guardian without anyone knowing for sure whom the parents would have wanted to raise the child. By designating someone in the will, the parent is able to consider not only family relationships and who may have the financial resources to raise the child but also, and perhaps more importantly, who would raise the child as the parent would have raised the child had he or she been able.
By spending a little time and money now, parents of young children are able to ensure that their children, as well as their assets, are protected in the event tragedy strikes the family when the children are young. The peace of mind obtained will be worth the expense.
By: Melissa Nolan
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