Young or old, when contemplating your estate plan, it is important to view it not only as an asset protection tool, but also a family protection tool. Even a simple estate plan can provide valuable safeguards for your family’s future. For example, in the event you and your spouse were deceased, who would take responsibility for the care and support of your minor children? Without a proper estate plan, the probate court of the county where your children reside would appoint a guardian for your children, who may or may not be the person you would have otherwise wanted as their guardian. On the other hand, a proper estate plan allows you to nominate those individuals as guardians for your children that you feel would best serve the interests of your children after you and your spouse are gone. It also allows you to discuss the practicalities of this situation beforehand with such individuals to ensure they are comfortable with the responsibilities associated with being the guardian for your children.
Aside from choosing an appropriate guardian for your children, a proper estate plan can protect your children financially. In the event you have a life insurance policy, whether individually or through your employer, without a proper estate plan, the proceeds from such life insurance policy could potentially be paid in full to your children. Regardless of how responsible or irresponsible your children may be, it is never wise to give them a large, lump-sum of money at a young age. All you need to do is think about what you would have done if you were given $25,000 or more at 18-years old, or even 25-years old, to shed light upon the potential dangers associated with this. Additionally, such funds could be subject to attack by creditors or result in the appointment of a guardian by the probate court to serve as the custodian of your children’s money until they turn 18-years old. Thus, whether it be through a trust established during your lifetime, or a trust established at your death, any funds otherwise distributable to your children should be held for some period of time by a third party to ensure they are used wisely and for the benefit of your children.
Another potentially difficult situation that can be avoided by a proper estate plan is if you were to become temporarily or permanently incapacitated. If so, your family may be locked out of those accounts you own individually, thus restricting their access to funds that may be critical to their continued well being during your incapacitation. With a proper estate plan, you could grant another individual the authority to access such accounts on your behalf for the care and support of you and your family.
Without a proper estate plan, you also prevent any advanced end-of-life planning, and you could force your family to bear the tremendous burden of having to decide whether or not life-sustaining treatment should continue to be administered to you. It is easy to appreciate the lasting effects such a decision may have on your loved ones, which is why you should take the decision away from them by making it now in your estate plan, whether that decision be to continue life-sustaining treatment or not.
So, if estate planning is the last thing that is on your mind right now, I challenge you to ask yourself, “what will happen to my family if I were to unexpectedly pass away or become temporarily or permanently incapacitated?” If you answer honestly, you will realize all the dangers associated with believing you do not need an estate plan, and I urge you to contact the estate planning attorneys at Stark & Knoll to discuss setting up an estate plan that meets your needs and eases your concerns.
