The family estate planning guide

Every parent I meet asks me the same first question. Who takes the kids if we're both gone? The rest of the plan grows from the answer.

The guardianship question

Guardianship for minor children is decided in the will, not the trust. That's one of the few estate-planning decisions that must happen in a will document, even when the rest of your plan lives in a trust.

Arizona recognizes two types of guardian. A guardian of the person cares for the child day-to-day: housing, school, and the basic work of raising a kid. A guardian of the estate manages any money the child inherits if there is no trust structure to handle it. The same person can serve as both, but often shouldn't.

A.R.S. § 14-5203 governs parental nominations of a guardian for minor children. The court gives substantial weight to a parent's written nomination but is not bound by it. The court's ultimate obligation is to the child's best interest. In practice, a clearly documented nomination from both living parents almost always controls.

Pick the person, have the conversation, and write it down. Picking without telling the person is how families end up surprised at the worst possible moment.

The trust that holds the money for your kids

If your children inherit significant assets without a trust in place, Arizona law requires a conservatorship to manage those assets until each child reaches 18 (A.R.S. § 14-5401). The conservator reports to the court. The court approves distributions. Legal fees come out of the assets. At 18, whatever is left is handed to the child in a single check.

A revocable living trust with minor's trust provisions solves this entirely. You define how and when the assets are distributed. Common structures include staggered distributions at 25, 30, and 35. Another common approach is discretionary distributions for health, education, maintenance, and support until a stated age. A third is a lifetime trust with a professional trustee that protects assets from creditors, divorces, and poor judgment.

We build most family trusts with an initial discretionary stage (trustee has flexibility based on the child's actual needs) followed by an outright distribution at an age you specify. The age depends on the amount of money, the child's maturity, and how you want to approach the role of inheritance in your family.

Picking a trustee who isn't the guardian

Parents routinely want their sister, their best friend, or their brother-in-law to raise the kids AND manage the money. Usually, one person is great at one job and not at the other.

A better structure. Name the guardian for daily care. Name a separate trustee or corporate trustee for money. The guardian requests funds for the child from the trustee. The trustee approves reasonable requests. Disagreements are rare when the structures are separate, because each role has limits.

When the same person serves both roles, there's no check on spending decisions. That's a problem even in good-faith situations. It's catastrophic when family dynamics drift.

Life insurance: size it to actually replace what you do

Most parents underbuy life insurance. The quick math: if you earn $120,000 a year and your youngest is 4, you need coverage that replaces 14 years of income (to age 18) plus college and a cushion. For a Mesa family with a mortgage, two kids, and one working parent, that's often $1.5 million to $2.5 million per spouse in term insurance. That's a reasonable round number for underwriting, not a prescription for your specific household.

Stay-at-home parents need coverage too. The labor of raising children has a replacement cost. Paying for childcare, household management, and transportation for twelve years is a six-figure expense.

Term insurance, not whole life, for this use case. Twenty-year or thirty-year term, level premium, matched to the age your youngest becomes independent. Own the policies in your individual names if you are not near the federal estate tax exemption. Own them in an ILIT if you are.

The beneficiary designation trap

Life insurance and retirement account beneficiaries pass directly to whoever is listed on the form, independent of your trust and your will. Naming a minor child directly as the beneficiary of a life insurance policy or retirement account creates the exact problem the trust was designed to avoid: the assets go to a conservator, managed by the court, handed over at 18.

Name the trust as contingent beneficiary. Your spouse is usually the primary beneficiary. If your spouse predeceases you or dies simultaneously, the trust takes over. Some families make the trust the primary beneficiary and use separate strategies for the surviving spouse. That structure is situation-specific and worth discussing with counsel.

What Arizona intestacy does if you have no plan

If you die without any estate plan and your spouse survives you, A.R.S. § 14-2102 gives everything to your spouse if all children are also your spouse's children. If you have children from a prior relationship, your spouse gets only your separate property. Your children inherit your half of the community property.

If both parents die without a plan, your children inherit everything through an Arizona conservatorship until 18. The court picks a conservator. Your kids get the money in a lump sum at 18. Read that last sentence again before you consider skipping the trust.

Updating as your kids age

Review the plan at several milestones. When each child reaches a trust-age milestone you built in (18, 21, 25). When you have another child. When a guardian's situation changes (divorce, illness, move out of state). When your financial situation changes substantially. At age 18, the minor's trust provisions for that child begin to wind down and you can simplify the document accordingly.

In practice, most families revisit the plan every three years even without a specific event.

Next steps

If you have kids under 18 and your current plan is more than five years old, or if you don't have a plan at all, schedule a free 30-minute consultation. We review what you have, identify the gaps, and quote a flat fee for the work your situation calls for. You'll know the number before you commit.