As parents, you’re hardwired to prioritize our children’s well-being above all else. You work tirelessly to provide for them and do everything in your power to ensure they have every opportunity to thrive. Yet, amidst the hustle and bustle that is parenting, it’s easy to overlook a crucial aspect of their future: what happens to them if we’re no longer here to care for them?
It’s a scary and sobering thought, but one that deserves your attention. You may assume that in the event of your untimely passing, your children will automatically be cared for and inherit your assets. However, the reality is far more complex and potentially unsettling.
Let’s unpack why relying on these assumptions could leave your children’s future in uncertain hands.
The Intersection of Your Money & Guardianship in Illinois
Yes, it’s true that your children will inherit your assets upon your passing, but what happens if you leave behind a spouse and kids. In Illinois, 755 ILCS 5/2-1(a) provides that: “1/2 of the entire estate to the surviving spouse and 1/2 to the decedent’s descendants.” This means that your spouse will only get 50% of the money you leave behind and your kids will get the other half. If they are minors and under the age of 18, their half will now be controlled by the courts and your spouse will not be able to use that money without court supervision and accounting to the court, or even having to pay lawyers to ask a judge for permission, on how it is spent.
If something happens to both you and your spouse, the court will have to appoint a guardian to raise them (a guardian of their person) and someone to manage the money they are inheriting (a guardian of their estate). Sometimes these roles will be left to the same people, but it is up to the judge to make that determination in your kids’ best interest. If the court-appointed guardian to raise them has bad credit and cannot qualify for a bond to care for the money, the court may appoint an officer of the court in the role of guardian, who will now charge your family an hourly rate to manage your money and file an annual accounting with the court to detail how it’s being spent. Without advance planning, the management of your money and assets will fall into the hands of a long and expensive court-appointed process and potentially, a court appointed guardian. A court-appointed guardianship is an expensive proposition for the people you love most, and worse, the guardian may not necessarily align with your values or financial philosophy, leaving your hard-earned assets vulnerable to mismanagement.
On top of that, and maybe worst of all, under current laws, once your child reaches the age of 18, they gain unfettered access to their inheritance, and it is distributed to them outright to use however they wish. While you may have envisioned these assets providing a foundation for their future education, family, purchase of a home, starting a business, etc… the reality is that many 18-year-olds lack the financial maturity to handle such responsibility. I don’t know about you, but I haven’t met a single parent that thinks this is a good idea. Personally, I know that I wouldn’t have been a responsible steward of my parents’ life savings at the age of 18 and today, I would’ve regretted the stupid things I wasted their money on. This is why the statistics show that on average an inheritance is either spent, stolen or lost in poor investments within a year of receipt. That’s why it is so important for parents to understand their options and how to safeguard their assets and inheritance through estate planning because the myths, assumptions and misunderstanding of what actually happens is unfortunate.
Naming Guardians
It’s extremely important for parents to name their chosen guardians on who they would want to raise their kids, instead of a stranger (a judge) making this decision for them, without their input. You know your family, friends, kids, their needs, and who is best suited to provide the best possible environment to raise them in the way that you would have wanted. This decision is comprised of choosing not only long-term guardians, but also financial guardians and short-term guardians.
Long Term Guardians: When choosing long-term guardians there is so much that goes into this decision and it’s not one to be taken lightly. It’s important to consider that if naming your sibling, you are aware that when you name them and their spouse… what would happen if your sibling was with you when you are in that fateful accident? Would you have wanted their spouse, and your in-law, to be the single parent to your children? Probably not. So, please be aware that when selecting guardians, it is important to name a list of your selections that expresses your wishes and the appropriate conditions. For instance:
- Jointly, if married and a two-parent household
- If they are living in Illinois
- If they are willing to relocate and move into our family home and the children’s residence
- If they are still attending _ church; or active members of _ religion
- If they are willing to facilitate regular visitation with __ family members
Financial Guardians: It’s also important to consider appointing a financial guardian to manage the children’s assets. Our clients often tell us that there is a family member or friend that would trust to manage their money and assets, but do not necessarily believe they’re the best suited person to raise their kids. We believe that when it comes to your kids and your assets, a system of checks and balances is often the best approach to ensure that your kids are well taken care of and prevent any possibility of financial abuse or mismanagement. Meaning that you will select a “Distribution Trustee” to manage your children’s assets and inheritance and they will be in charge of controlling and disbursing money to the day-to-day guardian raising the children when they need it. The most important part of making these selections is to choose people who will have a good working relationship to prevent any unnecessary conflict.
Short-Term Guardians: When selecting long-term guardians and financial guardians, it’s very common to select people who don’t live close by, who can get there on short notice. Not to mention, what if your long-term guardians, or even your spouse, are out of town on a work-trip or vacation if an emergency should strike. That is why it is so important to appoint and nominate several people who live within 20-30 minutes of you, who can get there on short-notice and have legal authority to care for your children.
Your neighbors and friends do not have legal authority to care for your kids, unless you complete the appropriate legal documents giving them the authority to do so. These individuals may not be your first choice to raise your kids long-term, but I’m sure that it would bring you comfort to know that if anything should ever happen to you, that you’ve completed the appropriate legal documents to know that your kids can be cared for by people they know, trust and love in an emergency. If you don’t, your children may be taken into foster care until a relative can be located to turn the children over to by the authorities. The police and social services only have authority to turn your children over to your “next of kin” and a relative, even if your neighbors and close friends are there when the police arrive and begging to take your children over them being hauled away in a squad car.
The Importance of a Children’s Protection Plan™
So, what’s the solution? Enter the Children’s Protection Plan™ —a planning option that has been created for parents by Family, Wealth & Legacy Legal Solutions (FWLLS) — a comprehensive legal planning system designed to safeguard your children’s well-being and financial future in the event of your incapacity or passing.
A Children’s Protection Plan™ empowers you to designate a trusted guardian who will step in to care for your children if you’re unable to do so. This ensures your children will be in the care of someone you know, love and trust, rather than leaving their fate to the discretion of a judge who doesn’t’ know your family, children or what you would have wanted. During this process, we work with our clients to create a personalized and detailed list of guardians and back-up choices, along with the conditions you feel are important and appropriate for each set of guardians for your children.
Moreover, a complete Children’s Protection Plan™ goes beyond long-term guardianship appointments. It includes a detailed roadmap for the management of your assets on behalf of your children, specifying how funds should be allocated for their upbringing, education and other needs. By setting clear guidelines, you mitigate the risk of financial mismanagement and ensure that your children’s inheritance serves its intended purpose: supporting their growth and development.
In addition, we work with our clients to ensure that there are several short-term guardians in place and they have the necessary legal documents in place instructions for any caregivers, babysitters or nanny’s, so they know what to do and who to call before EVER contacting the police, so that our client’s children will never be placed in foster care if an unexpected and unfortunate emergency strikes.
Leave Behind Detailed Instructions
Naming legal guardians is just the first step. Your Children’s Protection Plan™ won’t do much good if the people named in it aren’t aware of your plan or your wishes. You want to make sure your children’s guardians know your desires for their upbringing. Some things to include might be:
● The values and life lessons that you want to leave behind and for them to live by
● Messages and instructions regarding your faith and religious practices
● Philosophy on education and where you’d want them to go to school
● Activities you’d want your children involved in
● Allergies, nutrition, medical care, or any other health considerations
We’re often shocked that 99% of all estate plans leave absolutely zero instructions behind on how you want your children to be raised or how to properly implement your plan. If you left your children with a babysitter for the weekend, you would create a list of instructions, give them a tour of your home and call to check-in everyday. Yet, in people’s final set of instructions that they will leave behind there is much less instruction on how to raise your children than you would have left for the weekend babysitter. That is why one of the greatest benefits of working with a Family, Wealth and Legacy Lawyer is that we make sure that everyone named in your plan is informed of what to do if the unthinkable happens to you. And, if you are working with me, I’ll be there to guide them each step of the way if something should ever happen to you.
Planning for the Future
At Family, Wealth & Legacy Legal Solutions (FWLLS), we understand the gravity of planning for your children’s future. That’s why we offer personalized Life & Legacy Planning® Sessions designed to consider your family dynamics, and your assets, and then help you choose the right planning package and fees to safeguard and protect what matters to you most.
Whether you’re a new parent or revisiting your estate plan, our team is here to provide the guidance and expertise you need to secure your family’s future for generations to come. Schedule a complimentary 15-minute call to learn more about our unique Life & Legacy Planning process. During your complimentary 15-minute call, we’ll explore your current arrangements and identify any gaps that may leave your children vulnerable.
Don’t leave your children’s future to chance. Take the first step toward peace of mind and lasting security. After all, your children deserve nothing less than the assurance that they’ll be cared for and cherished, no matter what the future holds.
Schedule a complimentary 15-minute call below to get started.
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This article is a service of Family Wealth & Legacy Legal Solutions (FWLLS). At FWLLS, we do not just draft documents; we ensure you make educated, informed and empowered decisions for yourself and the people you love. That’s why we offer a Family Wealth & Legacy Strategy Session™, during which you will get educated and begin to prepare to avoid life’s most common legal problems and get a plan in place to make the best possible choices for the people you love. You can begin by calling our office today to schedule a Family Wealth & Legacy Strategy Session and mention this article to find out how to get this $750 session at a significantly discounted rate, or even for free.