“I am not old enough for an estate plan.”
“Wills and Trusts are for the rich. All I have is debt and kids.”
“Who me? I’m still healthy.”
All of these are common responses when parents of young children are asked if they have prepared an estate plan. But consider the consequences….
When parents leave their young children with babysitters, they leave detailed instructions: when to feed the baby, how often to check the diapers, both parents’ cell phone numbers, the neighbor’s phone number, grandparent’s phone number, snacks, bedtimes, a reminder to have the children brush their teeth, etc. All of this planning and the parents are only going to dinner and a movie! But what if a tragedy occurred? Perhaps the parents get into a car crash on the way home and are either hospitalized long-term or, worse yet, they never return home again. Who would take care of the kids then?
Accidents happen. Even young and healthy people can have calamity strike – whether it’s a car accident, stroke, heart ailment, etc. Terri Schiavo slipped into a coma at the age of 26. She hadn’t done any estate planning; we all know how that turned out. If responsible parents leave detailed instructions for a babysitter, shouldn’t they also plan for the unthinkable and death? Of course. But what should they be giving consideration to?
Who will care for the kids? Through a Will, a parent can designate a guardian for their children. This individual will be able to jump in and raise the children if the parents are unable to do so. Without a Will, the probate court will step in and name a guardian – but that person might raise the children differently than the parent would have.
Who will manage my children’s money? A Will should also name a conservator for minor children. This individual is responsible for managing the children’s finances. Similar to a guardian, if no planning is done, the probate court will name a conservator for the minor children. In this case, the parents have lost the ability to make sure it is someone that they trust with financial decisions.
How and when will assets be distributed upon death? If the parents have little by means of assets, a “simple Will” may suffice for asset distribution. However, as assets increase, parents may also want to give thought to a Trust. A Trust provides more flexibility and can be used to make sure the children do not inherit everything at the age of majority.
What happens upon the disability of a parent? Absent an estate plan, if a parent is in a coma or otherwise unable to make their own decisions, it would be necessary for a family member to petition the probate court for the appointment of a guardian and conservator. This can be avoided through the execution of a Durable Power of Attorney (for financial decisions) and a Designation of Patient Advocate (for medical and mental health treatment decisions). By signing these documents, parents can ensure that people of their choosing will make their decisions for them.
Life is uncertain and full of surprises. Estate planning is essential for parents of young children; even more so than the precautions taken when leaving children with a babysitter. Preparing an estate plan can help secure the future that you desire for your children.