When you have minor children, estate planning means choosing who will raise them and who will handle the money you leave them if something happens to you. In Missouri, you have specific legal tools for naming a legal guardian and setting up a trust to manage your children’s inheritance. Understanding your options can help you make informed decisions that protect your children’s well-being and financial security.
Choosing a legal guardian
A will is the main legal document in Missouri for naming a guardian for your children if you can no longer care for them. While the court makes the final decision, it usually gives strong weight to your choice. You can also write a non-binding Letter of Intent to share your wishes for how to raise your children.
When selecting a guardian, it is best to choose an individual who shares your values and demonstrates a similar approach to parenting. Your selected person should also be physically capable and have the financial resources to care for your children. Additionally, you may also want to name a successor guardian in the event that your initial choice is unable to serve when needed.
Why a minor’s trust is necessary
In Missouri, a child typically receives their entire inheritance at age 18 when there is no trust. This can be risky because many young adults are not yet prepared to manage a large sum of money responsibly. A minor’s trust offers a safer alternative by holding your wealth in trust and allowing a trustee you choose to manage these assets for your child.
One advantage of a minor’s trust is that funds can go to a child’s Health, Education, Maintenance and Support (HEMS). This means the trustee may use trust assets to pay for important living expenses, including:
- Medical care
- School or college costs
- Housing
- Clothing
By allowing access for these purposes, the trust can help meet a child’s needs while still protecting the principal from being distributed all at once.
You can also structure the trust to make staggered distributions over your children’s lifetimes. This gives them time to mature while protecting the inheritance until your children can manage the money responsibly.
Trustee vs. guardian: Understanding the roles
While the guardian and trustee may be the same person, they are distinct positions with separate responsibilities. A legal guardian cares for your children until adulthood if you die or become unable to do so. They must provide a safe, supportive home that helps protect your children’s stability and well-being.
A trustee administers the minor’s trust in accordance with your established terms. They make financial decisions in your children’s best interests and help protect the inheritance so that it is used prudently over time.
Ensuring your children’s future care and needs
Creating a complete estate plan that safeguards your children requires a two-pronged approach. You must name the right people and structure your financial vehicles strategically. A lawyer can help you draft or update your plan to include these vital protections.