Young Families Life Planning Considerations
Young families have a lot on their minds.
Usually, somewhere in the mix, the thought of “what would happen to the kids if something happens to us” comes up.
There is a lot of confusion – like most legal concerns – about what would happen. In reality, the chance of the State getting involved in taking care of the children is small. However, it is something clients express to me as a concern far more often than they need to.
There two main things I want parents with minor children to consider:
– Who they want to nominate to the court as Guardians, and
– What assets types are available to provide for their care.
Parents can make a nomination to the court as to their wishes to take care of their child(ren). The court is apt to follow the nomination, unless there is some reason that the nominee should not be appointed.
The asset issue is one that is critical to understand. Often, at the beginning, someone will tell me they have named a sibling as the nominee and left life insurance to that person. There are real exposures to that “plan.” The option of naming the child(ren) directly has its own issues that will actively keep the court in the middle of most if not all decisions about the child’s care.
Young Families Life Planning Options
Similar to most stage options, my starting point for every client is the same. That point is execution of proper decision-making documents…the 5 Essential Documents. These documents include:
- Healthcare Power of Attorney/Appointment of Authorized Healthcare Representative
- Release of HIPAA Restrictions (HIPAA Waiver)
- Living Will or other Advanced Medical Directive
- Financial/Property (General Durable) Power of Attorney
- Funeral Planning Memo
As referenced above, there are two important considerations for parents with minor children: Guardianship and Consolidating Assets to Take Care the Kids.
Guardianship is an important consideration as it is possible that person may provide care for your child(ren) for several years. It is important to consider the person’s age, health, and housing situation as it pertains to taking the responsibility of raising the child(ren) to independent/adulthood.
As to gathering, protecting, and instructing asset use for your child’s care, the types and value of assets dictate the level of planning appropriate to meet you solution. Because many younger parents carry a good measure of life insurance, a common trust is a good mechanism to capture the distribution of that insurance with a plan to care for all children as needed until the youngest reaches a minimum age. This is a good device as it allows for the amount necessary to get all the children to a defined age, usually older than 18, while giving the Trustee the ability to distribute as needed, not limited by the limitations of equal distribution.
A proper Life Planning Solution can save the time, money, and headache of Probate. Plus, it can protect an interest of a surviving spouse who may otherwise be accidentally left off of the ownership of the family dwelling.
To determine what you solution options might be right for you, I give clients 5 Essential Questions to consider. They give you conversational topics to discuss to that will identify some priorities for your Life Planning Solution.
Your situation is far more unique than you may realize. Let’s talk about it.
Call (219) 230-3600 or (765) 999-1823 to schedule an appointment, or
Visit meetme.so/rgskadberg to schedule an initial phone call appointment.