A lot of people think estate planning is for the old or the rich. "I have a young family and not very many assets," I hear people say sometimes. Don't cheat yourself or your family just because you haven't yet "arrived" in your financial life or because your life is filled with "childlike" activities.
I have a young family, too. See?
Here's some information to start you thinking about it . . . .
Is Your Family “Too Young” to Need an Estate Plan?
If you are a family with small children, your day-to-day is probably a mix of wiping spills, picking up toys, and somehow stumbling towards the end of the day hoping your kids are fed, bathed, and in one piece! Each day can seem exhausting and time may seem scarce. Estate planning is probably not at the top of your priority list. And you might even find it hard to justify planning for an “estate” you haven’t yet established!
But here’s the thing… all families, especially those with minor children, need an estate plan. It's probably quicker, cheaper, and easier than you think, and your family will be grateful that you took the time to put a plan together.
Here are a few estate-planning issues for young families to keep in mind:
Who Will Have Custody of Your Children?
If you die or become incapacitated before your children reach 18, they will need a legal guardian. To ensure your children are only ever in the care of people you want and choose, you need to name both temporary and long-term guardians for your children and legally document your choices.
And, naming just one person or a couple won’t cover it either. Name at least 3 options, in case back-ups are needed.
Also, make sure that you have not just named legal guardians in your Will, for the long-term. You need to think about the short-term, too.
If something happens to you and your child is home with a babysitter, or at school, you want to name local people, friends or family, who would immediately be able to be called upon by authorities. And, those people need to have legal documentation on hand to step in and make immediate, short-term decisions for your littles.
We recommend a comprehensive plan to protect the kids to ensure there are no gaps, for even a minute, in providing the care of the people you love most.
The Management of Your Children’s Inheritance
Remember, when you die, the assets left to your minor children will need to be managed by someone at least until they turn eighteen. If no one is identified for this task, the court steps in and appoints “professionals” to take over the role, which can cost your children their entire inheritance.
And, it’s totally unnecessary. With just a bit of prior planning, you can keep your loved ones out of the Court system entirely and give total control to the people you know, love and trust.
The Authority to Make Decisions for You
Finally, no matter what your age, or how big or small your assets are, you want to put in place the documentation that appoints the people you want making decisions for you, if you cannot make your own decisions.
Once again, the focus here is on keeping the people you love out of Court during what would be a hugely stressful time for them.
Estate planning is a key part of growing up, and showing up for the people you love. So, yes, you may be a young family, but once you’ve become a family, you’re not too young to plan well to make things as easy as possible for the people you love.
Estate planning can give your young family the peace of mind, confidence, and security you desire when it comes to the future well being of all members of your family.
It's a new year. Don't delay your planning any more.
— John Anderson, Esquire