It can be heart-wrenching to contemplate a scenario in which one's children are left without their parents' protection and guidance. However, smart Florida residents are aware that planning for a possible future for their kids that does not include themselves is necessary to ensure that the children are taken care of in the event something terrible does happen.
One of the first steps in this process is to understand that the person who is charged with the actual care of the children is not necessarily the best choice to be caretaker of the financial resources left to the kids. The skills required to handle a financial portfolio and to handle the day-to-day care of minors can vary greatly.
Because of this, the use of a trust is often a good option. Setting up a trust for the benefit of the children means that one can make specific rules as to when and how the funds contained in the trust's corpus can be used. It is important that Floridians think carefully about who is the trustee in such cases. While it might make sense to have the children's custodian as the trustee, there are situations in which a better idea may be to set a separate bequest to the custodian and have the trust administered by a different person or entity, which may have more financial experience and a more objective approach.
Many factors need to be taken into account when deciding how much money it will take to see the kids into adulthood. Along with necessary expenses, like clothing, food and shelter, other costs, such as healthcare and education, must also be considered. Further, there may be unexpected expenses that occur that must be handled by the children's new guardian.
Obviously, preparing for these potential problems can become fairly complex, and Florida residents with children may consider talking to an estate planning professional about the best way to handle the situation. That way, decisions, such as the type of trust, and what restrictions to place upon the trustee can be made with more peace of mind.
Source: The Street, "How to Give Away Your Kids," Kathryn Tuggle, July 28, 2014