Mistake 1: Naming a Minor Child as a Direct Beneficiary

One of the most problematic but common errors is naming a minor child directly on a life insurance policy, retirement account or bank account. While the intention is good, the legal outcome is not.

Minor children cannot legally inherit property outright. If a minor is listed as a direct beneficiary, a court supervised conservatorship will be required. This conservatorship controls the child’s money until age 18 and involves:

• Annual accountings
• Court hearings
• Legal fees and administrative expenses

These conservatorships are time consuming, costly and restrictive. Even more concerning, the child receives full control of the funds at age 18, which is rarely what parents want.

A much better solution is to have children inherit through a trust or through a Uniform Transfers to Minors Act arrangement. These options avoid the conservatorship process entirely and allow you to give thoughtful instructions for how the money should be used and when it should be distributed.

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Mistake 2: Forgetting to Update the Plan When More Children Are Born

Another common mistake happens when families grow but the estate plan does not. Many parents create a plan when they have one or two children but forget to update their documents after additional children are born or adopted.

This oversight can lead to unequal distributions, outdated beneficiary designations, or even accidentally excluding a child. Whenever your family changes, it is important to review your will, trust and beneficiary forms to ensure every child is included according to your wishes.

Estate plans are living documents. They should grow and evolve with your family, especially during the years when children are being added to the household.

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Mistake 3: Naming a Couple as Guardian Instead of an Individual

Choosing a guardian is often the most emotional and meaningful part of estate planning for parents. However, many families unintentionally complicate this decision by naming a couple instead of a single individual.

Listing a couple as joint guardians creates a problem if that couple ever separates or divorces. At the time of your death, it may not be clear which person you intended to care for your children.

To avoid confusion, it is usually best to list a specific person as the guardian. If that person remains married at the time of your death, their spouse can still pursue legal steps to become a second guardian. Naming an individual simply prevents ambiguity and reduces the risk of disagreement among relatives.

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Frequently Asked Questions

1. Do I need a trust if I have minor children?
You may. A trust is often the simplest way to avoid court supervision and ensure your child’s inheritance is managed responsibly until they are older.

2. Can I name more than one guardian for my children?
You can, but it is usually best to list them in order of priority rather than jointly. This prevents delays and disagreement during emergencies.

3. How often should parents update their estate plan?
Parents should review their documents whenever a new child is born or adopted, or whenever family circumstances or financial situations change.

Author

Claire creates wills and trusts which provide security and peace of mind. She compassionately listens to her clients’ dreams, goals, and fears and then fashions plans that best meet their needs. It is important to Claire that her clients understand different options and make decisions that are right for them. She loves to educate clients by drawing out complicated concepts.

Come visit us! Conveniently located in Rochester, Minnesota.