If the first thing parents learned about estate planning, was that it is a way to protect their children from being raised by their rebellious brother, chances are good that every parent would rush to have their estate plan done.
Most of us understand that an estate plan is to distribute assets after we die. However, anyone with children under age 18, need to know that their will is used to name who they want to raise their children if they should both die. A will is also used to name the person who will take care of the money left for the children. This should be taught in Parenting 101.
Wealth Advisor’s recent article, “What's missing from your estate plan?” advises that it’s not a good idea to have the same person perform both of these tasks. Separating the people who care for your kids from those with free access to the money left behind, is a better choice. If the parents’ estate plans do not include instructions concerning the children, those left behind can have drastically different opinions about where the children should live and how they should be cared for.
When families feel strongly about those issues, it also creates difficulties for the children. They’re not only mourning the loss of the parents, but now their loved ones may be at each other’s throats, in a legal attempt to gain custody that will drain resources and divide the family. However, there are some simple steps that can avoid this additional cost and emotional trauma.
Leaving assets in trust to your children allows you to name someone to be in charge of those assets while they are young, and invest them on their behalf until they come of age and can learn to manage their share. This method also allows you to name one person, who has the right financial skill to be in charge of the money, and you can name a totally different person to be the guardian for your children and care for their daily needs. These two individuals can then counsel together as to what the best decisions are for discretionary distributions for your children while they are minors.
Don’t leave a hole in your estate plan by omitting a document that addresses what happens to you, if you become incapacitated. A living will, also known as an advance directive, is an essential component of a complete estate plan. This document answers "end of life" questions, particularly whether a person should be kept alive by artificial means. Most of us don’t want our families making those difficult choices, so have your estate planning attorney draft an advance directive, so they won’t have to.
Another part of your estate plan that protects people, is a medical durable power of attorney. If you don’t have one in place, and you are incapacitated, your family and medical providers have to guess as to your wishes in certain situation. Name a person to take on this role and have candid conversations about what you would want. This spares your loved ones from further stress during a difficult time, and lets you have more of a choice about your own care.
Parents of young children need to have an estate plan, as soon as they become parents. Contact the Soto Law Firm today to speak with an estate planning attorney, who will be able to make sure that you and your young family are prepared for the ups and downs of life.
Reference: Wealth Advisor (August 27, 2018) “What's missing from your estate plan?”