Got Kids? Get an Estate Plan

From Gene Kaine’s Estate Planning Law Blog wrote this:

For many couples with young children, the expense of actually sitting down with an attorney may be the leading factor in delaying planning their estate.  When you’re trying to pay a mortgage, an estate plan may seem like a luxury you can put off until a later time.  But consider the possibility that something does happen to you and/or your spouse.  What would happen to your children? If you don’t decide who will take care of your children and put that decision into an estate plan, a court will make the decision for you should something happen.  And that may very well not be the best choice for your kids. . .

Once you’ve examined your feelings surrounding the issues involved in estate planning, it’s time for a little dose of reality.  Be very realistic about your resources and how they’ll be used.  If you want your estate to be used for sending your children to college, you need to also think about how they will be supported until they actually reach the age to go to college.  The first thing you need to think about is supporting your children.  They need food, clothing and shelter first.  College is a secondary consideration. . .

To get the ball rolling, sit down and make a list of the property you own, how it is titled, the fair market value and how much you owe on it (if anything).  List all your life insurance and retirement plans, how much they’re worth and who the beneficiaries or owners are.  Now is the time to think ahead.  Don’t just think about your current situation but think about what your family will need in the future.

In many estate planning consultations, the hardest decision for most of my clients is not how to divide the property if something happens; my clients struggle most with naming a guardian for the kids. Who will get the kids if both mom and dad die or become incapacitated? The paternal grandparents? The maternal grandparents? Or will the maternal aunt be best? Or the paternal uncle? More often than you think, none of the above. (To make it more difficult, I usually recommend nominating at least three persons in succession, not co-guardians.)

Another aspect that is infrequently considered is who will manage the assets for your kids. For example, check your life insurance policies. You likely named your spouse as initial beneficiary and your children as contingent beneficiaries. Great, right?  First, if your children are under 18, you have built-in court proceedings because children cannot receive property or benefits outright. A conservator would need be appointed which means attorney fees, Guardian ad Litem fees, court costs, and bond expenses. Second, even if your child has reached 18, would you trust your 18 or 19 year old to wisely manage $100,000 in insurance proceeds? (When I was 19, I would not have spent it on Georgia Tech but probably bought me a new truck (or two).)

So I agree, if you have minor children, you need an estate plan regardless of the size of your bank account.