Put Estate Planning at the Top of the List for Your New Baby
Baby showers, cribs, soft blankets, and adorable outfits followed quickly by diaper changes and lack of sleep usually preoccupy the minds of new parents. However, estate planning should also be prominent in the minds of parents. While it is not a pleasant thought, all parents need to think about what will happen to their children if they are not around. Who will take care of them if you both die in a car wreck? Who will take care of them if one of you dies and the other parent is left incapacitated from an accident? This is usually not an easy answer for parents. Will the children move to grandma’s house, two hours away, away from their school and friends? Will they go live with your brother and his family? What if several relatives want the children? This can lead to a court battle where various family members are fighting to gain guardianship of the children. What if a family member is trying to gain guardianship because he or she thinks she will get control of your money? Trust me, in my experience the “bad” relatives are the first to try to gain control.
Through estate planning, you can control the outcome of this situation. You have the right to say who will take physical care of your children and who will take care of their money (this may or may not be the same person). You decide the guidelines for how money should be spent for the children and when the children should receive the remaining money. If you fail to plan, the court will make a plan for you. The court may or may not select the person you would want to take care of the children. Further, if the court controls the outcome, any money for the children will be turned over to them at age nineteen. Do you really want your nineteen year old to receive a windfall of money?
Parents should consider these questions and work with an estate planning attorney to formulate an estate plan that addresses these issues. Generally, the plan will be a Last Will and Testament or Living Trust that lists guardians. The document will also name a trustee to be over the children’s money and will state when and how the children will receive control of the money. If the child is disabled, the trust provisions will hold assets so that the child is able to receive any government benefits to which the child is entitled while the trustee is able to provide for supplemental needs of the child.
Parents often tell me that they put off estate planning because they cannot answer these questions. Do not postpone it. Postponing is a game of chance that may mean a court is deciding the fate of your children.
– Melanie B. Bradford is a partner at Bradford & Holliman, LLC, in Pelham, Alabama. Her law practice focuses on estate planning. This article is for educational purposes and is not intended for specific legal advice.
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