Estate Planning for Young Families
Individuals who have young families have special considerations. They often need to take specific and direct steps to protect their spouse and children. While many individuals postpone estate planning until they are older, doing so can lead to disastrous consequences.
Nominating a Guardian
One important consideration is to nominate a guardian for minor children. A guardian is a person who will take over raising a child. He or she must usually be appointed by a court. This nomination is usually part of a will. The surviving parent will continue to raise the children. However, it is important to nominate a guardian in case something happens to the other parent or the parent is a single parent. Much consideration must go into nominating a guardian. This person should be someone the testator trusts. This individual will have legal authority to make decisions about the children, such as what type of medical treatment they receive, where they go to school and where they live. If a guardian is not named, the court has to appointment someone without the benefit of knowing the parent’s preferences.Development of Trust
Minor children cannot directly inherit property. As such, many young couples create trusts that direct how remaining assets will be used for the benefit of their spouse and children. Another important consideration is appointing a trustee. Some spouses choose the surviving spouse. Others may choose someone who is particularly good at handling money or who the parent believes will follow the instructions of the trust. If a person is not specifically named to manage your children’s inheritance, the court may have to appoint someone to complete this task. This may be a professional trustee, which can cost a lot and take from the inheritance the child is entitled to receive. If written instructions are not provided, the full inheritance may be given to the child when he or she reaches the age of 18, an age that many parents believe is not old enough to prudently manage an inheritance.Purchase Life Insurance
The primary reason to have life insurance is to provide financial support to dependents. Life insurance can replace the earnings for a number of years while the children are still minors. Having life insurance allows the surviving spouse to have access to cash he or she needs to support. Single parents may need to consider a person they trust to manage funds for minor children or name the trust as the beneficiary of a life insurance policy. The person making the estate plan may want to consider how many years it will be until his or her children will not need any support and multiply this by his or her earnings to determine the amount of life insurance is necessary. He or she may need to take into consideration other factors, such as whether additional services would be needed if there is only one parent involved.
Prepare for Disability
Part of an effective estate plan considers what will happen in case the testator becomes incapacitated. The parent may want to establish an advance medical directive. This is a document that sets out a person’s wishes for end-of-life decisions. For example, a person can decide whether or not he or she wants CPR or life support if he or she has a terminal condition or is permanently unconscious.Another piece of an effective estate plan is to draft a durable power of attorney for health care. This is a document that gives one person the legal ability to make medical decisions for another person. The individual should consider the wishes of the person and any instructions included in his or her advance directive when making these decisions.
Another important estate planning document is a durable power of attorney for finances. In this document the principal names an agent to handle financial transactions and to make financial decisions for him or her. This document can include limited or broad financial powers, depending on how the power of attorney documentation is included.
It is important to establish these documents while a person is healthy. If he or she lacks legal capacity, he or she cannot create a valid document. A court order may be the only way to trigger decisions, which is often time-consuming and expensive.
Legal Assistance
Individuals who would like to protect their family may decide to contact an estate planning lawyer for assistance. He or she can explain various estate planning documents and make recommendations about the types of documents that should be put in place.Read more on this legal issue
Ways to Avoid Property Guardianships for Minors
Accounting for Digital Assets in Your Estate Plan
How to Select a Trustee, Executor and Agent
Child Not Included in Will - Can They Challenge It?
Ways to Avoid Property Guardianships for Minors
Accounting for Digital Assets in Your Estate Plan
How to Select a Trustee, Executor and Agent
Child Not Included in Will - Can They Challenge It?
Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and.how they may affect a case.
