Estate Planning When You Have Minor Children

Disclaimer: This is educational information, not legal advice. Every situation is unique. Consult with a qualified estate planning attorney before making decisions.

The Quick Answer

If you have children under 18, you need a will. The most important line in it is who raises your kids if you can't. Everything else in estate planning matters, but nothing matters more than this.

Why Parents Need Estate Planning

Estate planning for parents isn't primarily about money. It's about answering three urgent questions:

Who raises your children? Without a will, a court decides [1]. A judge who has never met your family will appoint a guardian based on statutory priorities and the court's own judgment. That may or may not be the person you'd choose.

Who manages the money you leave behind for them? Minor children can't legally inherit assets directly. Without a plan, the court appoints someone to manage funds on their behalf, and that person may not be who you'd pick either [7].

What happens if you're incapacitated but alive? A car accident or serious illness could leave you unable to manage your family's finances or make medical decisions. Without the right documents, even your spouse may face legal hurdles to act on your behalf [3].

The Core Documents Parents Need

1. A Will With Guardian Nomination

This is the foundation. Your will does three things [2]: it names a guardian for your minor children, it names an executor to manage your estate, and it directs where your assets go.

The guardian nomination is what makes a parent's will different from anyone else's. You're not just deciding who gets your stuff. You're deciding who raises your children. Both parents should have a will, and the guardian nominations should be consistent.

Name an alternate guardian in case your first choice can't serve. And have the conversation with your chosen guardian before putting it in writing. Being named in a will shouldn't come as a surprise.

2. A Financial Power of Attorney

A durable financial power of attorney names someone to manage your finances if you're alive but unable to do so yourself [3]. For parents, this is critical. If you're in the hospital for weeks, someone needs to pay the mortgage, manage insurance claims, access bank accounts, and keep the household running.

Without one, your spouse may need court approval to handle even routine financial matters, depending on how your accounts are structured and what state you live in.

3. A Healthcare Advance Directive

This document states your medical treatment wishes and names a healthcare agent to make decisions for you if you can't communicate [4]. As a parent, this isn't just about end-of-life scenarios. It covers any situation where you can't speak for yourself and your family needs clarity.

4. Beneficiary Designation Review

Retirement accounts (401(k), IRA) and life insurance policies pass directly to the named beneficiary, regardless of what your will says [5]. If your beneficiaries are outdated, or if you've named minor children directly (which creates legal complications), the money may not end up where you intend.

For parents, it's generally better to name your spouse as primary beneficiary and your estate or a trust as contingent beneficiary, rather than naming minor children directly. Children can't legally receive a large sum, so the court would need to appoint a custodian anyway [5].

What About Life Insurance?

Life insurance isn't an estate planning document, but for parents it's closely connected. If you have minor children, life insurance provides the financial safety net that lets your guardian actually raise your kids without financial hardship.

The amount varies by family, but a common starting point is 10 to 12 times your annual income. Term life insurance (which covers a set period, like 20 years) is significantly less expensive than whole life insurance and is typically sufficient for parents who need coverage while their children are young.

Do You Need a Trust?

Most parents with straightforward situations don't need a trust right away. A will with a guardian nomination, plus a power of attorney and advance directive, covers the essentials.

However, a trust can be useful if you want to control how and when your children receive assets (rather than everything at age 18), if you have substantial assets, or if you own property in multiple states. Some parents create a simple testamentary trust within their will. This creates a trust that only comes into existence after death, specifically to hold assets for minor children.

The Biggest Mistake Parents Make

Waiting. More than half of American adults don't have a will [6], and parents of young children are among those most likely to put it off. The reasons are understandable: it feels morbid, it feels expensive, and it feels like something that can wait.

But the risk isn't abstract. If something happened to both parents tomorrow and there's no will, a court decides everything. The guardian. The money. The entire future of your children's daily life.

Getting a basic will done, even an imperfect one, is dramatically better than having nothing.

How to Get Started

If your situation is straightforward (married, no blended family, modest assets): An online legal service can produce a valid will with guardian nomination for $100 to $300 in an afternoon.

If your situation has any complexity (blended family, business ownership, special needs child, significant assets): An estate planning attorney is worth the investment. Initial consultations typically run $200 to $500.

Either way, the most important step is the conversation with your spouse about who you'd want to raise your children. Have that conversation this week. The paperwork can follow.