Estate planning offers benefits to every adult; however, estate planning is especially important for parents. Not only does a comprehensive estate plan ensure that your assets will protect and provide for your children when you are gone, but it can also help pass down the legacy you want to leave behind for generations to come. To help you better understand, the estate planning attorneys at Legacy Care Law Firm discuss the importance of estate planning for parents.
Why Is Estate Planning Important for Parents?
As a parent, you undoubtedly have a fundamental desire to safeguard your children’s well-being and protect the legacy you hope to leave for them. By creating a comprehensive estate plan, you can ensure that your children are provided for while also minimizing disputes that may arise after you are gone. Your estate plan can also accomplish a variety of other objectives that are usually important to parents with children of all ages.
What Can My Estate Plan Accomplish?
Before becoming a parent, you likely thought of your estate plan as singularly focused on the distribution of your estate assets in the event of your death. While your estate plan will certainly continue to accomplish that goal now that you are a parent, you will also find that a more comprehensive estate plan can provide numerous and varied additional benefits for a parent, such as:
- Allowing you to designate a Guardian for your children. Most people are unaware that a Last Will and Testament is the only official opportunity available to nominate a Guardian for your minor children. If one is ever needed, for any reason, a judge will have to officially appoint someone. Letting your wishes be known in your Will is the only way that judge will know who your choice was for a Guardian.
- Managing the inheritance of minor children. When your children are minors, they cannot legally inherit from your estate. That means that an adult must manage the inheritance you leave behind for them until they are old enough to legally inherit. You undoubtedly want to choose who manages that inheritance. By creating a trust, you can do that through the appointment of the Trustee. The Trustee you appoint will oversee the administration of the trust and disburse the trust assets according to the terms you establish in the trust agreement.
- Staggering the distribution of an inheritance meant for adult children. The benefits of a comprehensive estate plan do not end when your children reach adulthood. While they may legally be able to inherit directly from your estate, it may be unwise to hand a young adult a large lump sum inheritance. That same trust you created when they were minors can be used to stagger distributions from the trust when your children are adults, allowing them to slowly learn how to manage the inheritance they receive.
- Planning for the possibility of incapacity. While protecting your children certainly means planning for the possibility of your death, it also requires you to consider and plan for the possibility of your incapacity. If incapacity does strike, who will care for your children? Will they have the legal authority to do so? Will they have access to your financial resources? All these questions can be addressed and answered in a comprehensive estate plan.
- Ensuring that assets are immediately available to provide for your children. Directing assets to be passed down to your children or to your spouse to provide for your children is not enough to protect your children if those assets get held up in probate. Fortunately, a comprehensive estate plan can include probate avoidance tools and strategies that can ensure sufficient assets are quickly available to provide for your children if something happens to you.
- Helping to pass down your legacy. Like many parents, you may hope to pass down more than just material assets. What are the ideals and beliefs that have guided you throughout your lifetime? What is important to you? What guiding principles do you think are important to pass down to future generations? The answers to these questions become part of your legacy plan that can be incorporated into your overall estate plan. Estate planning tools such as an incentive trust can be used to help pass down that legacy.
- Avoiding disputes and litigation. As a parent, the last thing you want is to see your children involved in a dispute that could lead to litigation because of your death or incapacity. Your estate plan can help prevent such disputes. For example, by executing an advance directive you prevent a dispute that could lead to litigation over who will make healthcare decisions for you if you are incapacitated. Adding a funeral planning component to your overall estate plan both ensures that your final wishes are honored and prevents disputes over how your body and/or funeral should be handled after you are gone.
Are You Ready to Get Started with Estate Planning?
For more information, please join us for an upcoming FREE seminar. If you are a parent who is ready to get started with your estate plan, contact our estate planning attorneys in our North Andover, Woburn, and Beverly offices at (978) 969-0331. Our Salem and Nashua, New Hampshire office can be reached at (603) 894-4141.
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