WHY SHOULD YOUNG PARENTS WORRY ABOUT ESTATE PLANS?
I am the father of three wonderful children, a son and two daughters. Like most parents, I love them more than anything and want to do everything to protect them and give them the best life I can. If you are reading this, you are probably a new parent or a parent of young children—and congratulations, it is one of the most important accomplishments in your life. I do not need to tell you how much your life already has, and will continue to change, probably forever. As a parent of one or more young children, one of the last things you want to think about is what would happen to the kids if you and/or your spouse died. As an estate planning attorney, however, it is my job to plan for anything that could happen in the future and try to control as many possibilities I can. As a parent, it is your obligation to ensure that if the unthinkable does happen, that your children will be taken care of in the best possible way. Trust me, you will sleep better at night knowing you have done all you can to protect your children.
Probably the last thing you want is for a court to decide who will raise your children and who will be in charge of their finances. You do not want a court battle of relatives wanting to either raise the children or decide their finances. Court battles are often time consuming, public and very costly. As a parent you want to control as much of the outcome as possible because you know what is best for your children.
Estate planning is one of the best ways to protect your children, both now, and as they grow up. For example, while you cannot, by a will, bind a court on custody (the court always has a say in the best interest of a child), you can certainly have a say in who you believe should raise the children. You can also have a say on who should handle the finances for the children. An example I often give my estate planning clients is the (family movie scenario) where the wacky sister is amazing at raising children but couldn’t balance a check book on a bet. On the other hand, the uptight accountant brother is as cold as can be, but is a financial whiz. In this case the sister could be named guardian of the person (the person appointed to raise the children to adulthood) while the brother could be named the guardian of the estate (the person appointed to control the children’s finances). Of course, this is just a Hollywood example and many times, one person will be perfect to raise the children and take care of the money, but it is certainly something to think about.
Here is another thing to think about–what if you pass away with a substantial amount of wealth while your children are minors? When each child turns eighteen, he or she will inherit the full amount of their inheritance share if there is no will and trust in place. There are very few eighteen year olds I know that could responsibly handle a large sum of money on their eighteenth birthday—giving serious concerns they will waste the money that was supposed to take care of them for a long time. With a trust, you can appoint a trustee, someone your trust to carry out your wishes. Often times we recommend children receiving their inheritance as follows: 1/3 at age 25, 1/3 at age 30 and 1/3 at age 35. Here, your child will most likely have graduated college and will be more mature, likely working, and ready to understand and value the money they receive. The beauty of a trust is that it is fully flexible and revocable, and can be amended as circumstances change. If one child becomes a billionaire and doesn’t need the money, the trust and will can be amended. If one child has significant needs and others do not, the trust and will can be amended. These are only a few small scenarios and possibilities. The fact of the matter is this, you have the right to have a say in your children’s personal and financial future, but you need to prepare the proper legal documents in order to have your wishes carried out. One of the best actions you can take to protect your children’s future is to have an estate plan in place.
There are many other benefits of estate planning. Schreiber & Schreiber offers free consultations allowing you to speak with a licensed attorney to discuss the many benefits of preparing your estate plan to protect your loved ones.
Eric A. Schreiber is a partner of the law firm of Schreiber & Schreiber, Inc., and is a licensed California attorney (SBN 194851). This article is for informational purposes only and should not be construed as legal advice or the creation of an attorney-client relationship. Copyright 2020 all rights reserved.