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Estate Planning

Estate Planning for Young Families

Many couples with young children or those without children yet do not think estate planning is for them. Estate planning is often associated with old people or those with large estates. However, estate planning is important for young families just as it is for older people and those with lots of assets. Unfortunately, even a young adult can face an untimely death or disability. Planning for that possibility, although not a pretty or fun thought, is both prudent and responsible.

Estate planning for a young family is not expensive and offers many benefits if a death or illness occurs. In addition to an estate plan, a young couple should look into insurance needs — life insurance, long term care insurance, and disability insurance.

Here are some of the essential parts of an estate for a young couple:

Who will handle my estate?

An executor handles an estate after someone dies. If you decide you need a revocable living trust, a trustee does something similar after you die. In both examples, the executor or trustee handle the financial affairs of the estate until it closes, including finding assets, paying bills, and finally distributing assets. Although for most couples, the executor is the spouse of the deceased there may be reasons you want someone else. In any event, it is always good to have a backup, known as a successor if the original executor or trustee cannot serve.

Who will be the guardian to my children?

The naming of a guardian is perhaps the most important reason for a young couple with few assets to have a will. Without a will, the court will appoint a guardian which can lead to ugly family battles to decide who will care for your children. It is important to name a guardian. A revocable living trust cannot name a guardian for minor children – only a will can.

There are two parts of being a guardian – one is for the child’s well being and one is for the child’s financial affairs. You can have one guardian who does both or decide only one is necessary.

How will my assets be distributed? 

Although most couples leave all assets to the surviving spouse, an estate plan also aids in determining how and if children will receive any of your assets.

Insurance Needs

Insurance is an important aspect of an estate plan because it addresses what happens if there is a loss of income due to a death or disability. Since I am not an insurance salesman or financial planner, I do not give advice on what you may or may not need. However, it is important to plan for unexpected events by purchasing life insurance (either whole life or term), disability insurance, and/or long term care insurance. There are lots of options out there, so you should sit with a qualified financial planner or insurance salesperson to decide what is needed.

 

Estate Planning

Estate Planning Tips if You Have Minor Children

Estate planning is different for every age group and for every person; however, there are certain categories of persons that could especially benefit from estate planning. People with young children often do not think about estate planning as they are busy raising children, starting professions, and beginning “adult lives;” however having children should be a reason to have a basic estate plan if you do not have any major assets.

Without an estate plan, the State of California would decide who has guardianship rights over your children. Further, if you do have any property, your children may not be able to use your property for their benefit quickly. A will, a revocable living trust, a durable power of attorney, and an Advanced Healthcare Directive should be part of your estate plan in order for your children to have the best support and least uncertainty if you die while they are still minors.

The following provides a short list of some estate planning tips if you currently have children who are under 18 years old.

  • Consider naming a guardian for your children and a separate guardian to manage any property for your children. You do not need to choose one guardian to be in charge of your children and to be in charge of your children’s property. There are many reasons you may want two.
  • Name a dependable executor and/or trustee. An executor (for a will) and a trustee (for a trust) will be in charge of your assets after you die, so you would want to ensure they are dependable and knowledgeable. It does not need to be a family member, so you can choose whoever you want. You should also have a back up in the case the executor or trustee is unable to serve.
  • Designate beneficiaries to your retirement accounts. Retirement accounts (401(k)s, Roth IRAs, or IRAS) can be passed on to heirs by filling out a Beneficiary Designation Form provided by your employer or whoever is holding your retirement account (i.e., brokerage). You can change the beneficiaries at any time.
  • Consider insurance. Life insurance and/or disability insurance are methods to provide for children or your spouse in the case you are unable to care for them financially. Although less a legal issue and more a financial issue, it is important to consider when making an estate plan.
  • Have a will and/or revocable living trust. The most important tip for an estate plan is to have one. You would not want your family struggling after your death or need to fight for assets that you wanted to leave to them. Even if you do not have any assets, a will is important to name a guardian for your children.

Please contact Attorney Anthony Marinaccio if you would like to discuss your estate planning options at (818) 839-5220.