By Attorney Maria Baler

Although we all know we should have an estate plan, many of us are too busy to take the time to create one. This is especially true for parents. However, taking the time to plan is one of the most important things parents can do for their children. Planning will ensure your children will be cared for and decisions will be made for them by people you choose and trust. It will also ensure assets your children inherit can be used for their benefit and managed responsibly until they are able to handle their own finances. Planning will also allow you to continue to protect your children in their young adult years if they need your assistance.

Here are five facts you should know about planning to protect your children.

1. If you are going to be unavailable for a period of time you can appoint a person to make decisions for your child in your place. Let's say you and your spouse will be out of town at the same time. A provision of the new Massachusetts Uniform Probate Code allows you to appoint a person to temporarily make decisions for your child, in your place, on matters such as the child's care or property, including health care decisions that may be required during your absence. This appointment must be made in writing, signed with certain formalities, and is effective for a period of up to 60 days.

2. It is important to create a Will that names a guardian who will care for your children if you are incapacitated or deceased. One of the most important reasons for parents to create a Will is to name a legal guardian for minor children (under age 18). The guardian will have legal decision-making authority about where the children will live, where they will attend school, what type of health care they will receive, and other day-to-day decisions regarding the children's care and upbringing. If you do not have a Will naming a guardian for your children, family members or others may "petition" the court to be appointed the child's guardian, and the court will have the difficult job of choosing among those who ask to be appointed. Under the new Massachusetts Uniform Probate Code, the guardian named in your Will would also serve as guardian for your children should you become incapacitated.

3. It is equally important to name a person to manage your children's assets. In addition to naming a guardian who will care for your children, a parent's Will can also name a conservator, who is a person the Court will appoint to manage the assets of minor children and make decisions about how those assets will be used for the children's benefit while they are young. When a child reaches age 18, he or she is legally entitled to receive control of assets held by a conservator. For most children, age 18 is too young to take control of money and spend it responsibly, especially a potentially large inheritance that may include real estate, retirement benefits and/or life insurance proceeds.

For this reason, a good estate plan to protect young children includes a Trust that will receive and manage a child's inheritance until the children reach an appropriate age to assume control of the inherited assets. The Trustee of the Trust will invest and use the assets for the benefit of the children based on the instructions in the Trust. For example, the Trust may permit the Trustee to make payments to the children's guardian for their living expenses, or to use Trust funds to pay for a child's private school or college tuition, travel, books, computers and other education expenses. Finally, the Trust will instruct the Trustee when to distribute any assets remaining in the Trust to the child, or may direct those distributions be made over time or at particular ages. A Trust can be very flexible, and the instructions parents include in a Trust for their children's benefit can and should be tailored to the specific needs of the family.

4. Don't forget to name appropriate people to take control of your child's UTMA and Section 529 Plan Accounts. A parent who is the custodian of a Uniform Transfers to Minors Act (UTMA) account may name a person in his Will to become successor custodian of the account if the parent dies. Similarly, parents who establish education savings accounts (sometimes called "529 Plan Accounts" or "Qualified Tuition Programs") are often permitted by the plan agreement to name a successor custodian or owner of the account who will have control over these funds for the benefit of the child if the parent is not able. These designations should be coordinated with the provisions of the parent's estate plan.

5. Young adults can create documents that allow their parents to help with decision-making in the event of a child's illness or incapacity.When your child turns 18, she is an "adult" in the eyes of the law. If your child is ill or cannot handle her own financial matters, the law will not allow a parent to automatically step in and take control of the situation. However, if a child is 18 or older, she can create a Power of Attorney and a Health Care Proxy that will permit a parent to make financial and health care decisions for the child in appropriate circumstances. Before your child heads off to college this fall, make sure these documents are in place to allow you to continue to protect your child if something unanticipated happens.

Too often, parents may neglect or postpone estate planning because they are young and healthy and feel as though they cannot afford to spend the money to create a Will. Estate planning also brings up feelings and attitudes that many parents prefer to ignore, and may require difficult discussions about which family members are or are not suitable to be a child's guardian or manage a child's money. But by failing to plan, parents leave the court with no guidance on who should care for their children should a tragedy occur, and may result in young children taking control of a large inheritance before they are ready to do so. In thinking about planning for your children, consider a plan that is appropriate for your children's current circumstances. As time passes and circumstances change, the plan can also change. It is always better to have a plan in place than to postpone this important decision altogether.