It is not unusual for someone to name their children, or a niece or nephew as beneficiaries, or contingent beneficiaries on their life insurance policies.  Sometimes an employer may offer group life insurance coverage and in haste, the employee names minor children as beneficiaries of that policy.  “I want them to have that money for their education” is something we often hear.

In Florida, if a minor becomes the owner of assets which exceed $15,000.00 in value, this triggers the need to establish a Court-administered Guardianship for the minor child.  These types of Guardianships are expensive, burdensome, and often do not last long enough to protect the child from foolishly wasting the money once they reach the age of 18.  At age 18, all of the remaining funds and property are turned over to the child in a lump sum.

A much better solution is for the parents to create a Trust for their minor children.  For young families, this is typically set up as a stand-by testamentary trust (created in a Will) that would not take effect unless the children’s parents were no longer living and someone needs to raise the children and use the monies left to them for their health care, education and upbringing.

In Florida, a child becomes an adult at age 18.  However, the age of adulthood and maturity do not often coincide, and so many parents prefer to stretch out the age at which significant amounts of money would be given to their child.  The only way to do that is by creating a trust for those children.

When parents or aunts and uncles prepare estate planning documents for minor children, the adults create the plan that they have chosen for their family members and their money, not a plan chosen by the Florida Legislature for them.

We love to experience the sense of joy and relief that young couples express to us when they have signed these documents to provide a well-designed plan for their children’s future.