Having children is a joyous and complicated time in life. New, you families are often preoccupied with the obvious every day tasks and may not consider things like estate planning. Many people either procrastinate the process, think they are too young to plan for their death or believe they don’t have enough assets to create an estate plan. Contrary to popular belief, you should begin estate planning as soon as you have children, regardless of how much wealth you have. The sad reality is that you never know when something may happen. Having an estate plan, however, can ensure your children are cared for given something were to happen to you.
Appoint a Legal Guardian
For most people, the most significant reason to create an estate plan is to have legal documentation outlining who will care for the children should something happen to both parents. It’s hard to fathom and even plan for such a tragedy. If something were to happen without a plan in place, however, the state would be given control to make such decisions. This would be a devastating experience for your children, and a stressful situation for family members as they decide what is best for your children.
It is, therefore, best that you and the other parent take the time to make well-thought-out decisions and proper plans outlining your intentions. It is advised to speak with any friends and family members you are considering legal guardians for your children. You will likely want to be in agreement with potential guardians so you can ensure your children will be in good and able hands. In addition, this allows you to go over your final wishes with the potential guardian.
You will more than likely intend for your children to inherit at least some assets, property, trusts and Payable-on-Death (POD) or Transferrable-on Death (TOD) accounts, such as life insurance policies, retirement accounts and bank accounts. If you haven’t already bought or opened the necessary accounts and trusts, now is the time to do so. If you so wish, you can list your children as beneficiaries so they can receive the funds at the time of your death. Without designated beneficiaries, the state may have control and the funds may not be distributed the way you wish.
When Can Children Inherit Assets?
When creating an estate plan and designating your children as beneficiaries, you hope it will not be needed until later in yours and your children’s lives. If, however, something happens while your children are still minors you may wonder when the children will receive the inheritance and funds. In addition, you may have living trusts set up so they can receive them at a certain age. Ultimately, when they receive them is your decision. Most parents plan for their children to receive such assets and funds at 18, 21 or even later, such as when they marry. This is a very personal decision. In the meantime, you will need to appoint a trustee or someone to oversee the necessary assets and funds until they reach the chosen age.
If you have recently started a family, now is the best time to start estate planning. An experienced trust lawyer O’Fallon MO respects can help you set up a plan appropriate to your situation and according to your wishes.
Thanks to our friends and contributors from Legacy Law Center for their insight into estate planning.