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Planning Considerations for Families with Young Children

Updated: May 28, 2020

For families with young children, the most important question for estate planning purposes is often who will care for children and manage assets on their behalf if both parents pass away prior to the children reaching majority. This is an important consideration for all families, regardless of the size or complexity of the estate.

As much as we may wish to avoid this unhappy subject, parents of minor children should take the time to plan for its unlikely occurrence. This is an issue of particular importance in the estate planning process because minors do not have the legal status or cognitive ability to make decisions about their care and finances, and Oregon law requires that an adult make those decisions on their behalf. If parents do not take an active role in nominating individuals to make these important decisions, it is up to the courts to make these determinations.

To make this subject a bit easier to digest, I find it helpful to break the issue into two discrete questions: (1) who will act as the guardian of a minor child (a guardian is a person who will make decisions concerning the care and well-being of a minor child); and (2) who will make financial decisions for the child and manage any assets on the child’s behalf. In most instances, the same person can fill the roles of guardian and financial decision maker. By planning ahead, parents can make the decision themselves regarding who will act as their backup decision maker, and can define specifically the scope of control and oversight that individual may exercise.

Providing for the Care of Minor Children

Parents can nominate a guardian for minor children in their will or revocable living trust as a recommendation to the court, but only a judge can actually appoint the guardian. A guardianship is separate from a conservatorship, in that a guardian is a person appointed to make decisions for the minor relating solely to their care and well being, but not financial decisions or asset management determinations. In most instances, the court will follow the parents’ recommendation whenever possible.

Management of Assets for Minor Children

Generally speaking, financial decision-making and the management of assets for a minor child can be accomplished through one of three avenues: conservatorship, custodianship, or trust. Each option comes with its own set of positives and negatives.


Without prior planning on the part of parents, the court will need to appoint a conservator (in addition to the guardian) to manage assets for the minor child. Conservatorships have ongoing costs, and the conservator must report annually to the court and post a bond for the value of assets under his or her management. Under Oregon law, once a child turns 18 years old, the conservator must deliver all assets to the child outright, and the conservatorship will be terminated. Most parents do not want their children to have outright control over their entire inheritance at this young age. Fortunately, a conservatorship can be avoided with basic estate planning.

As an alternative to a court instituted and supervised conservatorship, parents can dictate who will manage the inheritance for the benefit of a minor child through their will or revocable living trust. This type of planning has options for the level of control the nominee may exercise over inherited funds, either as a custodian or trustee.

UTMA Custodianship

Nomination of a custodian in a will or revocable living trust is the most basic alternative to a conservatorship. A custodian may hold money in an account only until the child turns 25 years old. This type of account is allowed under Oregon’s Uniform Transfers to Minors Act (UTMA), often referred to as a UTMA account. Appointing a custodian under the UTMA is more informal than a trust, and gives the custodian more discretion in management of the assets. A custodian is not required to provide annual accounting to the child unless requested, and no third party oversees the custodian account. Consequently, there is a greater risk of abuse with this approach, although the costs of administering a custodianship are much less than those typically associated with a trust or conservatorship.

Trust for Minor Children

Alternatively, parents can establish a trust within their will or revocable living trust, to take affect if both parents die before the children reach a specified age – typically 25, 30 or 35. An individual, bank, or trust company can be named as the trustee to manage the trust assets for the child’s benefit. The trust – the terms of which are laid out in the parents’ will or revocable living trust – provides guidelines for how the assets will be used during the child’s minority (certain types of education, travel, or a down payment on a first home are common examples), and at what age the trust will terminate and the remaining trust assets will be distributed outright to the child.

While court supervision of trusts is not required, the Oregon Trust Code does provide guidelines for management of trust assets, and is designed to limit the potential for abuse by a trustee. Administration of a trust for minor children is typically less expensive than a conservatorship (but more expensive than a UTMA custodianship) because of the lack of court involvement.

Planning for the care and management of assets for minor children is perhaps the most important aspect of basic estate planning for families with young children.

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