Children (Adults and Minors)

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If your children are minors, you need an estate plan as much, if not more, than a senior citizen. But, whether your children are minors or adults, a well-thought-out estate plan is a special gift that will help them through a very difficult time. Minor children Guardianship Gifts to minor children A child's right to inherit Adopted children Children born or adopted after the will Children conceived by artificial insemination Illegitimate children Legitimated children Step children No children

Minor children

If you are a parent of minor children, you face many estate planning choices. Who will raise your children if both of you die before they are adults? What rights do your children have to inherit from you? Who will manage the property your minor children will inherit from you? Have you taken steps to insure that your children will be financially secure if both of you die before they are adults? This brochure explains steps parents should take to plan for the future of their children.

Guardianship

Parents are the natural guardians of their children. If a child does not have parents, a court may appoint a legal guardian to care for the child and the child's property. The court may appoint a guardian of the person to take care of the child. The court may appoint a guardian of the estate to take care of the child's property. Or, the court may appoint a general guardian to take care of both the child and the child's property. A guardian appointed for a minor child may be either a resident or a nonresident of North Carolina. The guardianship automatically ends when the child reaches age 18.

If you do not have a will naming a guardian for your minor children, the court chooses your children's guardian without your help. The court's choice may be different from your own. Note: A parent who is dying or who is suffering from a progressive chronic illness may name a standby guardian who may be approved by the court before the need for the guardian arises.

With a will, you recommend to the court the person or persons you want to raise your children. The court considers your recommendation carefully and will appoint your choice unless your choice is disqualified or not in the best interests of your children. There is a strong presumption that the guardian named in a parent's will is in the best interests of the children.

If each parent names a different guardian, the court will consider the recommendation in the will of the last parent to die. If the parents die at the same time, the court relies on the most recently dated will in appointing a guardian for minor children.

A divorced parent with custody -- even sole custody -- does not have the exclusive right to name a guardian for the children. If the parent with custody dies first, the parent without custody remains a natural guardian of the children. The court does not appoint a general guardian or guardian of the person for a child who has a natural guardian unless that parent has wilfully abandoned the child. A parent cannot cut off the parental rights of an ex-spouse simply by naming someone else in a will as guardian.

Note: Other court procedures are available for terminating parental rights. Also, it is possible for someone who is not a parent, such as a grandparent, to ask the court for custody of the children even though one or both parents are still living.

Gifts to minor children

Minor children often lack the maturity to handle money or property. Legal restraints also hinder minors from dealing with property. Making gifts to minor children may require special care. Whether you give the gift during your lifetime or at your death, you have some decisions to make.

• Who will take care of the property for the child?
• When should the child receive the property?
• Should you put the property in trust?

The answers to these questions depend upon your individual circumstances. An attorney can help you make the best decisions.

Unless other arrangements are made, a court must appoint a legal guardian to manage property acquired or inherited by a minor child if the value of the property is greater than $1,500. To avoid this burdensome procedure, you may name someone to manage the property that a minor child receives from you. This may be accomplished in several ways, each with different legal and tax consequences.

• You may transfer property under the North Carolina Uniform Transfers to Minors Act. This law allows you to transfer property to a custodian to hold and manage for the benefit of one minor child. Each transfer may be made for only one minor. The child receives the property between the ages of 18 and 21, depending upon what age you specify in the document transferring the property.
• A trust is another legal arrangement you may use in transferring property to a minor child, either while you are alive or at your death. A trust gives you considerable control and flexibility. You name the trustee and set out the trustee's powers, duties, and responsibilities. You decide when and how amounts will be given to the beneficiaries. You decide how long the trust will last. You also decide who will get the trust property when the trust terminates.

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A child's right to inherit

Next to your surviving spouse, your children are the most natural beneficiaries of your generosity. However, the law does not require you to leave all or any of your property to your children upon your death. You may disinherit your children if you so choose. With a will, you decide how much each of your children will inherit from you. If you die without a will, your children will share your property with your surviving spouse. If you die without a will and you have no surviving spouse, your children will share your property equally. For more information, see the section If You Don't Have a Will.

Adopted children

Adopted children are treated as natural children under the law. They have the same rights as natural children to inherit from their adoptive parents. Likewise, adoptive parents may inherit from their adopted children.

In North Carolina, an adopted child does not have a right to inherit from his or her natural parents. Nor do the natural parents have a right to inherit from a child given up in adoption. (This rule does not prevent the parties from including each other in their wills.) The inheritance rights between a child and a natural parent are not changed if a natural parent is married to the adoptive parent.

Children born or adopted after the will

A child born or adopted after you sign your will has the right to inherit your property as if you had died without a will unless:

• You have made some provision in your will for the child, whether adequate or not.
• You made it clear in your will that you intentionally did not make specific provision for the child.
• You had children living when you signed your will, and none of them actually take under the will.
• Your surviving spouse receives all of the estate under your will.
• You made a provision for the child that takes effect upon your death, whether adequate or not.

Children conceived by artificial insemination

A child born as the result of artificial insemination is considered in all respects as a naturally conceived child of the husband and wife requesting and consenting in writing to the use of such technique.

Illegitimate children

In North Carolina, an illegitimate child has the same rights to inherit property from his or her mother and mother's family as any other child.

An illegitimate child does not have a right to inherit from his or her intestate father unless one of the following has happened.

• The father has legally been declared the child's father.
• The father has acknowledged himself as the child's father in a written document, signed before the proper North Carolina official and filed in the proper court at the proper time.

The father of an illegitimate child may include the child in his will. If the child is included in the father's will, the child may inherit under the will the same as a legitimate child.

Legitimated children

Children who were born illegitimate, but who have been legitimated under the laws of any jurisdiction, are entitled to inherit from their mothers and fathers the same as if they had been born in lawful wedlock. In North Carolina, illegitimate children are legitimated:

• when the putative father petitions the court to have the child declared legitimate; or
• when the mother of the child and the reputed father of the child intermarry at any time after the birth of the child.

Step children

Stepchildren do not have a right to inherit your property. If you want your stepchildren to inherit any of your property, you must include them in your will. However, your step children may inherit your property indirectly through your spouse (their parent) if you die first. Families faced with this problem have special estate planning needs. Consult your attorney for more information.

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No children

Estate planning for childless couples poses the problem of choosing alternate beneficiaries for each spouse. If they both agree on the alternate beneficiaries, their estate plan is simplified. Often however, they want their property to go to their respective family members if their spouse doesn't survive them. The following example demonstrates the inequities this situation can create.

Husband and Wife, who are childless, have "sweetheart" wills, leaving everything to their spouse, if their spouse survives them. In the event Wife does not survive Husband, Husband leaves his property to his two brothers. In the event Husband does not survive Wife, Wife leaves her property to her sister. Husband and Wife are in a car accident. Husband dies on impact. Wife dies four days later. Because Wife survived Husband, she inherits everything under his will. Upon her death, her sister inherits everything. Husband's two brothers inherit nothing.

The result would be the same if Husband and Wife had died without wills, assuming their brothers and sister were their respective heirs under the laws of Intestate Succession.

If Husband and Wife had died simultaneously, each of their estates would have been probated as if each survived the other. Thus, Husband's brothers would have inherited his property, and Wife's sister would have inherited her property.

If this potential problem is a concern, please ask your attorney to explain your options on how to avoid a potentially inequitable result for your family.

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References from the North Carolina General Statutes:
28A-24-1. Disposition of property where no sufficient evidence of survivorship.
28A-22-2. Shares of after-born and after-adopted children.
29-19. Succession by, through and from illegitimate children.
29-15. Shares of others than surviving spouse.
29-16. Distribution among classes.
29-17. Succession by, through and from adopted children.
29-18. Succession by, through and from legitimated children.
31-5.5. After-born or after-adopted child; illegitimate child; effect on will.
Chapter 33A. North Carolina Uniform Transfers to Minors Act.
35A-1224. Criteria for appointment of guardians.
35A-1370 -- 35A-1382. Standby guardians for minor children.
49-2. Nonsupport of illegitimate child by parents made misdemeanor.
49-10. Legitimation.
49-12. Legitimation by subsequent marriage.
49-14. Civil action to establish paternity.
49A-1. Status of child born as a result of artificial insemination.
52-10. Contracts between husband and wife generally; releases.

For information about the laws of North Carolina, see the Web site of the North Carolina General Assembly.

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Prepared by Carol A. Schwab, J.D., LL.M., Professor and Extension Specialist, NC State University.

This publication is provided as a public service and is designed to acquaint you with certain legal issues and concerns. It is not designed as a substitute for legal advice, nor does it tell you everything you may need to know about this subject. Future changes in the law cannot be predicted, and statements in this publication are based solely on the laws of North Carolina in force on the date of publication.

Date: July 2000