Becoming a parent for the first time is life changing. I can still vividly recall the feeling of holding a precious newborn in the wee hours of the morning in the hospital. Children are an incredible blessing and forever change your outlook on life. Along with the joy and exhilaration of having a new baby comes a whole new world of decisions, worries, thoughts and experiences. You are suddenly responsible for a new life!
Along with the many practical decisions that come along with the birth of a child (which car seat do I buy? which childcare options best suit our family?), becoming a parent is usually one's first foray into making important estate planning decisions. There is a lot of great information available, but it can still be overwhelming to consider and make such big decisions about your family’s future. So here are the basics that you need to know when it comes to your estate plan:
Do I need an Estate Plan? In a word, yes! Estate Planning is sometimes thought of as something only a very wealthy person might consider (a person with an estate!). But in reality, anyone with assets and especially anyone with minor children, should engage in estate planning. The type of estate plan a client needs varies greatly depending on their personal situation. But at the very minimum, a parent of a young child needs to have a will (more on that later).
What legal documents normally make up an estate plan? Most of my clients with young families hire me to prepare wills (both parents need their own will), a trust or trusts depending on the situation, power of attorney documents and patient advocate designations. A will and a trust mainly deal with disposition of property after death. A power of attorney and patient advocate designation direct who would be in charge of certain decisions in the event of your disability.
How do I name a guardian? One of the most difficult decisions a parent can make is whom to select as a guardian of their minor children in the event of the untimely death of the parent. The nomination of a guardian is done in a will. Although this is a legal document, this decision is so much more than a legal decision and requires a parent to take an honest look at their family relationships, their own parenting style and their hopes and dreams for their children.
Will or Trust? A Trust doesn’t replace a will but coordinates with a will to provide more control over the disposition of one’s assets. Additionally, assets placed in a trust will avoid probate upon death. Most parents of young children chose to create a trust and generally it is the most desirable way to go about estate planning for a family. However, due to cost or other reasons, some families chose to start with only a will and that is okay too.
What will the Estate Planning process be like? Making that phone call to initiate the estate planning process is a big step so I strive to make the process as smooth and painless as possible. I understand that it’s busy being parent to young kids (I’ve been there!) so often times the initial meeting takes place at my client’s home or a coffee shop.
My goal at the first meeting is to educate my clients about estate planning in general, answer all of their questions and also ask many questions. I always want to get to know my client, understand their family and their values, and guide them through the decision-making process by asking good questions and most importantly, listening. After our first meeting, I immediately begin to draft the estate planning documents. After I have completed the documents, which usually takes approximately two weeks, I schedule a final meeting to review and sign the documents. At the signing, I always give my clients detailed instructions (in the form of a color-coded to-do list) about any follow-up tasks they must do. Start to finish, the process is often completed in less than a month.
Have more questions about setting up an estate plan? I am here to help and would be honored to assist your family in this very important process.