I was working recently with a Louisiana mother who had been divorced. She had minor children and she wanted to make sure that any future inheritance of the children was protected.
We discussed how if she had no legal program in place, and if she passed away while her children were still young, then her ex-husband would petition the court to be appointed the guardian of the children, and that the court would issue the necessary court orders allowing the father to have control over her life insurance and retirement account proceeds. The father would then be required to submit annual accountings to the court showing how he was handling the children's funds, and the father would be required to petition the court when he wanted to spend the money on behalf of the children. In addition, when each of her four children reach the age of 18, the ex-husband will be required to dump any remaining funds left to the children in their lap. The mother is worried that her children, at age 18, won't be financially ready to have money thrown in their lap.
But her biggest concern was that if she died, her ex-husband would control all of the money that she wanted to be for her children. The ex-husband had remarried and had step-children of his own.
So we are establishing a trust as part of her overall legal program so that when she passes away, her life insurance, her retirement account assets, and her other real estate and financial assets will be placed in a trust so that her trusted long-time friend would handle the money and do the right thing for her children.
In addition we also put legal plans in place so that if the mother were ever incapacitated, her trusted friends and family members would have the authority to make her financial and medical decisions for her.