Three Estate Planning Mistakes Parents Can’t Afford to Make

As parents, we spend countless hours worrying about our children’s well-being, from their daily needs to their future success. But there’s one crucial aspect many parents overlook: what happens to your children if you’re no longer there to care for them?

At Cary Estate Planning, we’ve helped numerous North Carolina families create comprehensive estate plans that ensure their children’s protection. Unfortunately, we repeatedly see the same mistakes and misunderstandings when parents attempt to plan for their minor children’s futures.

The Critical Mistakes Parents Make in Estate Planning

1. Not Creating an Estate Plan at All

The most significant error is simply not having an estate plan. Many parents assume they’ll live to see their children reach adulthood, making planning seem unnecessary. The harsh reality is that unexpected tragedies do occur, and without proper planning, your children’s future becomes uncertain and potentially chaotic.

In North Carolina, if you pass away without a will or guardianship designations, the court will make crucial decisions about your children’s care and your assets—decisions that may not align with your wishes.

2. Choosing Guardians Without Proper Consideration

When selecting potential guardians for your minor children, many parents make quick decisions based on family relationships rather than thoroughly evaluating who would provide the best environment for their children’s upbringing.

Important factors to consider include:

• Philosophical and religious alignment with your values
• Educational priorities and approaches
• Financial stability and responsibility
• Geographic location and lifestyle
• Willingness and ability to raise your children in the manner you would want

The ideal guardian should commit to raising your children according to your wishes and values, not simply how they personally believe children should be raised.

3. Misunderstanding When Children Should Receive Assets

Many parents assume their children will automatically receive their inheritance at age 18 and that they’ll make wise decisions with those assets. This is rarely the best approach.

While North Carolina law recognizes 18-year-olds as legal adults who can own property and make decisions, most teenagers lack the financial wisdom to manage significant assets responsibly. Without proper planning, your hard-earned wealth could be squandered on impulsive purchases rather than supporting your children’s long-term needs like education, housing, or career development.

How Parents Can Create an Effective Estate Plan for Their Children

Step 1: Establish a Comprehensive Guardianship Plan

A thorough guardianship designation should:

• Name a primary guardian and at least one alternate
• Include detailed instructions about your parenting philosophy
• Address religious, educational, and healthcare preferences
• Provide financial resources for your children’s care

Under North Carolina law, you can designate guardians in your will or through a separate guardianship document that meets specific legal requirements. Our attorneys can help ensure your guardianship designations are legally sound and comprehensive.

Step 2: Set Up Trusts to Protect Assets for Minor Children

Rather than leaving assets directly to minor children, consider establishing a trust that:

• Provides for your children’s needs while protecting assets until they’re mature enough to manage them
• Distributes funds at appropriate ages or milestones (college graduation, purchasing a first home, etc.)
• Names a trustworthy trustee to manage assets according to your instructions
• Includes provisions for health, education, maintenance, and support

For example, a properly structured trust might provide funds for college expenses and basic living costs while delaying full distribution until ages 25, 30, or even older, depending on your children’s unique circumstances.

Step 3: Consider Special Needs Planning

If you have a child with special needs, standard estate planning could actually harm their eligibility for government benefits. Special needs trusts can:

• Provide supplemental care beyond government benefits
• Maintain eligibility for essential programs like Medicaid and SSI
• Address your child’s unique requirements throughout their lifetime

North Carolina has specific rules regarding special needs trusts, making specialized legal guidance particularly important in these situations.

Step 4: Regularly Review and Make Updates

Estate plans should evolve as your family grows and changes. We recommend reviewing your estate plan:

• After the birth or adoption of each child
• When your children reach significant milestones
• If your financial situation changes substantially
• If potential guardians’ circumstances change
• Every 3-5 years, regardless of major life events

Our Personalized Approach to Family Estate Planning

At Cary Estate Planning, we understand that planning for your children’s future is deeply personal. That’s why we’ve developed a process centered around understanding your unique family dynamics and priorities.

Our process begins with a free Discovery Call to understand your concerns and ensure we’re a good fit to work together. From there, we schedule an in-person or virtual complimentary Initial Strategy Session with one of our attorneys, who will discuss various planning options and pricing tailored to your family’s specific needs.

Unlike firms that offer one-size-fits-all solutions, our personalized approach ensures your estate plan aligns perfectly with your parenting philosophy and goals for your children’s future.

Take Action to Protect Your Children’s Future

The thought of not being there for your children is unbearable, but failing to plan makes an already difficult situation potentially devastating for those you love most.

Don’t leave your children’s future to chance. Contact us today to schedule your Discovery Call and take the first step toward creating a comprehensive estate plan that protects what matters most—your children.

We serve families throughout the Triangle area from our offices in Cary, Raleigh and Chapel Hill, providing personalized estate planning solutions that give parents peace of mind about their children’s future security.