Estate Planning for Your Children
Often times, a young couple will call my office when they have had their first child. They tell me “We have a baby now, we need to get our Wills done.” When I meet with the parents, I find myself routinely answering the same questions and I see that they have relatively no idea on the issues they should be addressing. When they ask for a simple will, I ask the couple if it is their intention that the COURTS supervise how their child is raised. In some instances, this might be a good thing for the family. In my experience, any time the government is involved with my personal affairs, I find that it increases the expense and time in whatever I do. For example, if the parents have life insurance (which they almost always do), I ask them who they have designated as the contingent beneficiary of the life insurance. Usually the primary beneficiary of a life insurance policy is the other spouse. However, what if something happens to both spouses? Isn’t that really why this couple decided to call me. To address the legal issues if something were to happen to both of them. Who would get the insurance money if both spouses were to pass away? Sopme couples say they didn’t think about that. Others say they have listed their minor child. Either way, that life insurance money is going to be paid into Court and the Court will decide how the money should be used. I don’t like that result. That is why I counsel my clients to look at their options. One option would be to keep the Courts out of this situation and pay the money to a trust where YOU as the parents can decide how the money should be used NOT the Court. Why do you want the money that is supposed to be used for your children to be used instead for court filings, attorneys fees, etc.?
Once we remove the Courts from the equation, the next issue we need to address is how you would like the money to be spent on your child. Issues like education (private school, public, college, advanced degrees, etc), clothing, extra curricular activities. What if the child gets in with the wrong crowd and is now doing drugs. How should this be handled? (tough love, counseling, rehab?).
These issues any others need to be addressed if you want to do the planning right. In my experience, a simple Will does not address any of these issues.