When you have children, creating a will is of utmost importance. While this is especially true if you have minor children, your will can have a significant impact on the lives of your adult children as well. That’s why it’s crucial to understand how your property passes to your children and how your will might need to change at different stages of your kids’ lives.
As a general matter, children have no legal right to inherit your property. A few states, such as Florida and Louisiana, have laws that protect minor children from being completely disinherited, but for the most part, parents can leave (or not leave) assets to their children as they wish.
That said, if you die without a will or if your will is invalidated, your children will likely inherit a portion of your estate under your state’s intestacy laws. Also, if you unintentionally exclude a child from your will (as may occur if you fail to update your will after the birth or adoption of a child), that child is considered “accidentally disinherited.” Most states will still permit them to receive a share of your estate, however, the size of that portion will be out of your control.
The best way to ensure that your children will receive the property you want them to have is to understand of the nature of the property that can legally be willed to them, and write a will that clearly assigns them assets you want and they’re allowed to receive.
Almost any probate asset you own can be willed to your children, unless the law prohibits it. For example, the law may prohibit you from willing the entirety of your estate to your children if you have a surviving spouse. In nearly all states, your spouse has a legal right to inherit between one-third to one-half of your assets. This means that in most circumstances your children can only inherit from the remainder. If your spouse has waived his or her share through a prenuptial agreement or other contractual means, however, then you can typically leave your children all that’s yours to give.
For parents of underage children, nothing is more important than ensuring that your children will be financially, physically and emotionally provided for after you’re gone. A properly written will can give you peace of mind on this score.
The first step is designating a legal guardian for your children in your will. A legal guardian takes responsibility for your kids if something happens to both you and your children’s other parent. Ideally, that person would be someone your children will feel comfortable living with and who can provide for their fundamental needs, including food, clothing, shelter, education and healthcare. Barring exceptional circumstances, the court will grant legal guardianship to the named person. If this person is unavailable or deemed unfit, or if you fail to name a guardian in your will, the court will choose one itself. This why it is important to name a backup guardian as well. Similarly, if both parents pass at once and each parent proposed a different guardian in each of their wills, then the court will make the final decision. This could result in an unpleasant custody battle, so parents should try to agree on a guardian whenever possible.
You should also name a financial guardian or trustee for your children. In contrast to the legal guardian who would be responsible for your children’s daily upbringing, a financial guardian is responsible for managing your children’s assets until they reach the age of majority. This can be the same person as the legal guardian but doesn’t have to be. The financial guardian should be someone you trust and know to be responsible with money.
With respect to your assets, you need to decide on the best form of conveying them to your children. You may consider leaving most of your assets via testamentary trust, which would permit assets to be distributed to your underage children as needed until they reach a specified age or time where you’ve deemed they can manage the property responsibly. You might also consider designating a custodian under the Uniform Transfers to Minors Act (UTMA). Under the UTMA, a custodian may manage and distribute a minor child’s assets until the child reaches the age of majority, at which time the remaining assets are transferred to him or her. Other forms of distributing your estate may include revocable living trusts and irrevocable trusts, but these are legally binding documents separate from a will.
If you’re a parent with adult children, you may be most concerned about distributing your assets fairly and responsibly. You may be grappling with questions such as: Is it right to leave my children unequal amounts based on their needs? How can I make sure my drug-addicted child only accesses his inheritance after he gets clean? You might even be thinking of disinheriting a child altogether.
As with minor children, you should investigate the various ways you can distribute your property. You might opt for a straightforward bequest, where you give each child a certain percentage of your assets or specific bequests of property. Or, if you have concerns about the property being squandered, you may consider implementing a trust that puts controls on when and how much money is released.
If you’re considering disinheriting a child, seriously consider the ramifications. It can wreak emotional havoc, even if you don’t intend to be hurtful. If you do decide to disinherit a child, state in your will that the exclusion is intentional, otherwise it might be argued that it was an accidental disinheritance.
Stepchildren have no automatic legal right to your property through general inheritance laws or the laws of intestacy. To include stepchildren in your will, write a bequest that specifically names them and clearly identifies the property or percentage of your assets you’d like to pass to them. Even if you love them like your own, the law only recognizes biological and legally adopted children as your legal heirs.
Family situations change frequently with births, deaths, marriages, divorces and other life events. Be sure to keep your will updated to reflect these changes and your true final wishes.