Some of you might find this subject a little unsettling but what will happen to the money you leave your children if you and your partner should die before the children are of legal age (i.e. they are minors)?

We don’t have any you say… remember though you might have a hefty Term Life Policy with them as the beneficiaries and as it’s paid directly to them it bypasses creditors and such in the estate.

My thinking about this was brought on by the sudden demise of a co-workers ex-girlfriend in an auto accident. They have a daughter who is six and my friend has gone to get her but the Grandmother won’t let him have her. It seems there is a hefty insurance settlement due and Granny wants control of it.

Anyone remember the fight over Anna Nicole Smith’s estate? Same deal here… only much smaller.

But that’s just the beginning. Many times a relative is given the minor children and control of the money which is supposed to be given to the children when they reach their majority but often this doesn’t happen.

What happens is the relatives think the money is theirs and spend it any which way they feel like and when the children reach adulthood there isn’t anything left for them.

Sadly, my brothers have an employee that this happened to. He’s roughly my age and his parents died unexpectedly when he was about 10 and his sister 8. Back then (almost 40 years) an enormous Life Insurance policy of $325,000 was paid out and the money given to their uncle who took them in in Kentucky. They were not treated well and when he turned 18, he took his sister and moved out but all the money had been spent by the uncle mainly on junk for his own kids leaving the two of them penniless. As the guardian the uncle could spend the money any way he chose.

Should you fear that this could happen, you have the options of setting up what is called a conservatorship which is solely concerned with protecting the assets of you estate.

Lawyers and banks will do it but for hefty fees. Often the best choice is one run by the State. In Florida they are a lot less expensive and the state is a very “tight-assed” Scrooge when it comes to doling out money to the actual guardian of the children.

The state is very concerned that they never end up in the papers or be accused of squandering a minor’s estate with shoddy/risky investments or letting the guardians spend it on anything they want. Purchases have to be justified before they hand over money.

It’s something those of you (Nina dear!) with children should give hard thought to.

Your nearest and dearest may be the ones you want to take care of your children, God forbid something should happen, but would you trust them with the money you leave the kids?

And remember Granny whom you trust perfectly could kick the bucket too and the kids and money go to Cousin Spendthrift. You want someone who will be there to protect your kid’s interests.

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