Five things you need to outline in your estate plan to protect your children
You may think estate planning is just for the very rich or the very old. It’s not.
Whether you have young children or aging parents, a traditional or non-traditional family, a large house or a small car, you should have an estate plan.
An estate plan does more than just direct the distribution of your assets upon your death. It can protect young or vulnerable beneficiaries from bad decision-making, minimize taxes, preserve eligibility for government benefits, and appoint agents to manage your affairs in the event of your disability.
Despite its importance, only 4 in 10 adults in the U.S. have Wills, according to AARP—and the excuses are understandable:
- It is something you intend to do but simply have not gotten around to yet.
- You are young and have plenty of time before any of this will apply to you.
- You don’t have a lot of valuable assets.
- Death is an unpleasant subject.
Why You Need a Will
Without an estate plan, your family may be left unprotected and experience unexpected and undesired outcomes. Without an estate plan, state law will direct what happens to your property and a court will decide who will be in charge.
Without a Will or a Trust, your estate will be divided according to the laws of intestate distribution. The court will name an Administrator to settle the estate as well as Guardians for your minor children. The Administrator and Guardians chosen may not be the persons you would prefer. And without directions laid out in a Will or Trust to the contrary, minors will receive their inheritances at the age of 18, which can lead to disastrous results.
A good estate plan ensures:
- Your assets are distributed in the manner you direct.
- Young children will be cared for by people you select.
- If you are incapacitated, decisions affecting your personal and financial well-being will be made by someone you trust.
What to Include in a Will
An estate plan doesn’t have to be complex or expensive, but it should:
- Designate beneficiaries to receive assets upon your death and appoint an Executor to carry out your directions.
- Create Trusts, when appropriate, to manage and protect the inheritance of minors or persons with disabilities. The trust can be created in a Will or by a separate document. You and your attorney can discuss which is most advantageous for you.
- Appoint Guardians, both in your Will and with a standby designation, to assure that your minor children will be raised and cared for by persons you trust in the event of your death, incapacity, or absence.
- Designate a Health Care Agent to make medical decisions for you in the event you are unable to make them yourself, and to provide your family with directions regarding extraordinary medical care.
- Designate an agent under a Power of Attorney to make legal, financial, and business decisions for you. This will help avoid the cost and delay of court proceedings in the event you are incapacitated.
Whether you are creating a million-dollar trust for your children’s education or just making sure your favorite nephew gets your comic book collection, don’t put off planning your estate. Don’t let the courts and the default provisions in the law determine outcomes for you and your family. Be proactive and create a good estate plan. The peace of mind and security for your loved ones will be worth the time and expense.
Disclaimer: This article was originally written for publication in New York. Laws vary from state to state and not all of the statements made may be applicable in other jurisdictions. For any legal issue, local counsel should be consulted.
James F. Burdi, Esq., is a partner in Vishnick McGovern Milizio LLP’s Trusts and Estates and Elder Law Practices. He is the former counsel to the State of New York EPTL-SCPA Legislative Advisory Committee. He frequently lectures in continuing legal education at St. John’s School of Law and before various community organizations.
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