Estate Planning For The Young Family

20 Jun

Estate planning is not just for old people. Many young people especially new parents, should consider the consequences of not only an unexpected death, but what happens in the event either parent becomes incapacitated. Here are a few steps young parents should consider putting into place:

1. Gather Information. Put together your financial picture for the potential attorney who will be assessing your situation before recommending certain estate documents for you. Your financial picture should include not only your present assets, but your financial goals in terms of buying a house, starting a business, etc. 

2.Health Care Directive. This is a very important document for anyone’s estate and particularly young parents with children. A health care directive is a power of attorney which appoints an agent (usually your spouse), to make health care decisions for you should you become incapacitated physically or mentally. Most hospitals will not honor the directions of a spouse or friend without a written directive.

3. Guardians. Parents with children under age 18 should consider whom they would want to serve as a guardian were both parents to die unexpectedly. Absent a document specifying guardianship, a court may be forced to make a decision for you as to who will take care of the children and who will make financial decisions on their behalf. Additionally if the parents plan to create a trust, a decision should be made as to whether the successor trustee and guardian should be the same person or a different person. There should also be instructions for both the successor trustee and guardian regarding the investment of money set aside in trust for the benefit of the children.  

4. Life Insurance. A life insurance policy is an excellent way to provide liquidity for the estate in the event of death. We recommend that a revocable living trust be designated as the beneficiary of the life policy rather than individual beneficiaries, because among other reasons, there is the appointment of a qualified trustee charged with responsibility of managing the policy proceeds for the benefit of minor children. 

The true purpose of an estate plan is to make sure your wishes are documented regarding your health and finances in the event of death or incapacity. This is especially true for parents with young children.

 

Stephen J. Gross is an attorney practicing in the areas of wills and trusts, real estate law, business law, and asset protection. We offer a free 1/2 hour phone consultation to Pages LA readers. We can be reaches at 310- 652 8090 and/or please visit sjgassociates.com.

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