One of the first times many people think about estate planning is after the birth of a child. Whereas before you were not really concerned with who might inherit your CD collection or your vintage car, suddenly you are very concerned with what might happen to your child in the event of your death.
If only one parent is deceased, then typically the child remains with the surviving parent, absent allegations that the surviving parent is not providing adequate care. However, if both parents are deceased and do not have a will set forth a choice to provide care for the child and for the finances regarding the child, the family and loved ones are left to grapple with the decision, likely with court intervention. If your wishes are not contained in estate planning documents, then others will decide what is best for your child instead of you making the choices clear.
Another question that is common is this: Do I have to nominate the same person to take care of my child and to take care of the finances? The answer is that you do not have to select the same person, but oftentimes it is the same person. For instance, your parents may be too old to take care of a toddler, but you may want your mother to manage the financial affairs. In that situation, you can select your sister to take care of the toddler but nominate your mother to handle the financial matters. Other times, you may feel that the party taking care of the child will be in the best position to manage the finances and that is also an option.
The good news is that if you are thinking about it now, you can draft the estate planning documents to make it clear to your family and loved ones what your choices are for the benefit of your child.