A Will Lawyer, or Estate Planning Attorney, knows that not every story has a happy ending. For some of them, it’s a professional mission to make sure that young parents are prepared for the unthinkable, says KTVO in the article “Family 411: Thinking about estate planning while your kids are young.”
It’s a very easy thing to forget because it’s so unpleasant to consider. The idea of becoming seriously ill or even dying while your children are young is every parent’s worst fear. But putting off having an estate plan with a will that prepares for this possibility is so important. Doing it will provide peace of mind, and a road forward for those who survive you if your worst fears were to come true.
Start with a will. In a will, you’ll name a guardian, the person who would be in charge of rearing your children and have physical custody of them. Don’t assume that your parents will take over, or that your husband’s parents will. What if both sets of parents want to be the custodians? The last thing you want is for your in-laws and parents to end up in a court battle over custody of your children. Also, do the math and determine not just if the grandparents can handle things now, but also what about 15 years from now.
Provide for future now unborn additional children if that is a possibility.
Another important factor to consider is how to set up a trust to manage asset distributions. You should have life insurance that will be the source for paying for the children’s education, including college, summer camps, after-school activities and their overall cost of living. In addition, proceeds from a life insurance policy cannot be given to a minor. These funds should be payable to a trust instead of the child or children, to allow controls of the funds.
Such a trust can be a stand-alone document, called a Revocable Living Trust, or can be created as part of your will, which is a Testamentary Trust (because it is created as part of your Last Will and Testament).
What if your son or daughter turned 18 and were suddenly awarded $500,000? At that age, would they know how to handle such a large sum of money? Many adults don’t. A trust allows you to give clear directions regarding how old the child must be, before receiving a set amount of money. You can also stipulate that the child must complete college before receiving funds or reach certain milestones.
An estate plan with young children in mind must have a Power of Attorney for financial decisions and one for medical decisions. That allows a named person to make important financial and medical decisions on behalf of the child. You may not want to have their legal guardian in charge of their finances; some people are great with children and not so good with money.
However, for medical decisions, it is best to have one primary person named. In that way, any care decisions in an emergency can be made swiftly.
While you are creating an estate plan with your children in mind, make sure your estate plan has the same documents for you and your spouse: Power of Attorney, Health Care Power of Attorney, a HIPAA release form and a living will.
Speak with a local estate planning attorney who has experience as a Will attorney in planning for young families.
Reference: KTVO.com (Feb. 6, 2019) “Family 411: Thinking about estate planning while your kids are young”