Estate Planning for Your Children

If you have minor children, estate planning is a very important step when it comes to planning for your death. Failing to name guardians for your children in your will can lead to custody issues that are easy to avoid by simply taking the time to decide who you want to take care of your minor children in the event of your death. Determining who will raise your children if you die can be a difficult decision. For this reason alone many parents avoid the issue of custody decisions since they’re unable to find someone who they think will be the perfect guardian.

Avoiding the issue of guardianship is the number one reason why people fail to plan their estate or have a will. By procrastinating the decision about custody parents put their children at risk in the event of their death. Unless you name a guardian the courts will name someone they feel is right for the role of guardian. And this could be someone who you least wanted to have custody of your children. Court battles for custody can be long and drawn out, especially if there is more than one applicant who is seeking custody. This can place a huge financial and emotional strain on your children as well as deplete the assets from your estate. The worst case scenario is that no one applies to take custody of your children. The courts may decide to give custody to someone in your family who really doesn’t want the responsibility or your children may end up in foster care.

When planning your estate try to choose guardians for your children who you know will want to take them. Don’t feel that you have to choose a family member; friends you trust can also be ideal candidates. Consider separating guardianship of your children from the assets of your estate. By naming someone other than the guardian to be the trustee of your children’s money you ensure that there are some checks and balances in place when it comes to deciding how that money is spent.

Always have a backup named for the guardian in the event that your first choice is unable to accept the role. Keep in mind that if you name a couple as the guardian the issue of their breakup may become an issue and this can lead to a legal battle for custody. For this reason alone it’s a good idea to name individuals as guardians. If you’re divorced, consider your ex-spouse as the guardian. Most of the time, your ex will want to have custody anyway. Why make it more difficult by naming someone else as guardian and risking a lengthy court battle?

ESTATE PLANNING FOR YOUR SECOND MARRIAGE

While falling in love for a second time is a beautiful thing, it’s important to be aware that second marriages typically create the need for some fairly in-depth estate planning.

To ensure the bliss of this new union extends far beyond the wedding day, it’s critical to proactively and effectively address how your nuptials will affect your financial liabilities, existing benefits, and distribution of your assets to loved ones.

  1. Communication Is Key

The first and most important step to ensure estate planning success in subsequent marriages is to have open and comprehensive conversations with your spouse and your family. You must clearly articulate your wishes and your concerns, and you must also provide a forum in which family members can share their thoughts and concerns.

Because these conversations can quickly become tactically or emotionally overwhelming, it’s a good idea to engage a trusted estate planning attorney or a professional family counselor. This impartial, professional third-party will ensure that your family conversations are collaborative and productive.

  1. Don’t be Afraid to Ask the Hard Questions

Address estate planning details that are important to not only your long-term wedded bliss, but also the well-being of your entire family. Here are just a few of the key questions that come up in the event of a second marriage:

Do you or your spouse owe any debts to any ex-spouses?

Do either of you have other liabilities that might negatively impact each other’s financial standing?

Is either of you collecting benefits such as Social Security from a deceased spouse, and — if so — do you know how remarriage will affect those benefits?

If either you or your spouse-to-be are on Medicare or Medicaid, do you know if getting married will put the other party’s assets at risk?

If either of you have children from a previous marriage, do you know how you want to handle leaving assets to them and any other heirs?

If there are young children in your family, do you know how you plan to handle any guardianship issues and provide financially for those children?

Have you discussed whether you will keep your assets separate, commingle them, or create a hybrid solution that involves keeping some assets separated and commingling others?

Though this is just a sampling of the kinds of questions that can arise, it’s easy to see how one question can lead to another and another and so on. The complete scope of the situation can quickly become quite broad.

This is why it’s so important to create clarity around your wishes and then put those wishes in writing.

  1. Document Your Plan

Once you’ve come to terms with all the possible issues and done the up-front work of having those important conversations with your family, the last step to put all this to bed is to get the appropriate estate planning documents drafted – Wills, trusts, powers of attorney, healthcare directives, etc. Click here to learn more about these.

Estate planning decisions for second marriages and blended families can be complicated. Give us a call and we’ll help you get this done. Once your plan is in place, you can rest assured that your intentions will be carried out.