Are you a parent with minor children? If you are, your days are busy and your life is full. Probably the last thing you want to imagine is the possibility that you may not always be around. Who will take care of your children if something happens to you?
Have you even thought about a will or trust? Perhaps that’s something you’d consider when you’re older. You’re young, healthy, and, of course, you plan to see your children finish college, to walk your daughter down the aisle, to grow old with your spouse or partner and to play with your grandchildren. But we see on a daily basis that life doesn’t always go as planned.
I am often reminded of one of my favorite John Lennon lyrics, “Life is what happens to you while you’re busy making other plans,” from his song, “Beautiful Boy.” The song was written for his young son, Sean. And, in the same year the song was released, tragedy struck. Lennon was shot and killed in front of his New York apartment. Life doesn’t always go as planned.
As an estate planning attorney, I frequently see the sad consequences of a family facing an unexpected death, made even more difficult when minor children are involved. Does having an estate plan lessen the pain of an expected loss? Of course not. But it does take some of the burden off surviving family members: difficult decisions have already been made, priorities set, helpers designated.
An important component of any parent’s estate plan is addressing issues regarding the upbringing of your children. What happens if both parents die simultaneously, or within a short duration of time? A contingency plan should identify the persons you’d like to manage your assets, as well as the guardian you’d nominate to finish raising your children. In many instances, you may purposely designate different persons to deal with your money and your children so as to maintain a system of checks and balances. You don’t want the probate court deciding who will manage your finances, or guessing whom you’d prefer to raise your children.
Other issues to consider are whether you want your heirs to receive their inheritance directly, or whether you’d prefer to have the assets placed in trust. Funds from a trust can be distributed based on a number of factors that you designate such as their age, need and/or even incentives based on behavior and education. All too often, children receive substantial assets before they are mature enough to handle them properly, with devastating results.
Most importantly, give careful thought to your choice of guardian, ensuring that he or she shares the values you want instilled in your children.
Life can change in an instant. What are you waiting for?