When you have minor children, a Will is extremely important in order to name a guardian for your children.  The guardian handles the day-to-day care and custody of the child.  Minor children are unable to inherit most property and assets directly.  Therefore, under a Will-based plan, a conservator would need to be appointed through the court to oversee the child’s assets until the child turns 18, at which time the child will receive any balance of the assets outright.  The conservator, who may or may not be the same person as the guardian, must account to the court, on an annual basis, every single penny earned on the assets, and every single penny spent.  The accounting process is cumbersome and expensive.  Typically, the conservator must hire an attorney to assist him/her, which cuts into the assets set aside for the minor child.  Additionally, the child must have a disinterested third-party attorney represent his/her interests (called a guardian ad litem).  The guardian ad litem scrutinizes the account to ensure that everything on the account is true and accurate.  The guardian ad litem is another expense paid for out of the child’s assets, as is the attorney for the conservator.  

Due to the cost of the conservatorship, a Will-based plan is the least cost-effective plan for clients with minor children.  Also worth noting, is that all probate court documents and financial information is public record, so this is not ideal for parents with privacy concerns.  Additionally, most parents do not want their children receiving assets outright at age 18, and prefer to set a higher age for the child to have full access and control of their assets.  This is why our clients commonly choose to create a revocable trust, so that they can distribute assets to their minor children upon their deaths under the terms they have created during their lives.  Instead of a conservator, the Trust would oversee the assets, allowing for assets to pass outside of the court and the public eye.  The Trustee, appointed by the clients, will manage the assets and make distributions for the minor child’s needs.  Such a Trustee may be a loved one, friend, trusted advisor, and may or may not be the same person as the guardian named under the Will.  Parents are in control of setting the age that their children may receive their assets outright, if ever.  (If there are creditor concerns, or a possible divorce for your child, holding assets in trust indefinitely can help protect their inheritance.)  The flexibility of the Trust is attractive to most parents, is easy to set up, and is typically less expensive overall than a Will-based plan with a conservatorship appointment.