If you are expecting a child, then your world is about the change. Drastically. Speaking from experience, get your sleep now! Besides sleep, it is also time to put your Estate Plan in order.
Estate Planning and the birth or adoption of a child is different that your old Estate Plan. First of all, you have a need for a guardian. Second, you need a trust to hold assets until your child is ready to shoulder that responsibility. Each family is different, and there are different ways to address your particular family situation. We are happy to walk you through your options in person, feel free to call us! Meanwhile, here is a short introduction to some typical estate issues that arise when addressing Estate Planning and the Birth or Adoption of a Child.
Intestacy, Having No will at Death: If you have no plan, then your assets pass under the State’s plan. Also, without a Will, your child has no protective trusts. Further, your spouse or your children may receive more than you intend, leaving your wishes disregarded. The Intestacy Rules do not take your wishes into consideration. A Will allows you to craft a plan that reflects your real desires.
Will: Without a Will, the state decides where your assets pass at death. The State provides no protective trusts and disregards your wishes. A properly drafted Will ensures your assets provide for your child’s care.
Guardianship: Your Will allows you to appoint a Guardian of the Person. This person replaces you as the child’s parent.
Dynasty Trusts: Your Will can form protective trusts for your child. The terms can be crafted to fit your specific needs, but standard clauses allow the use of funds for your child and select an age when the child can be trusted to control the resources alone. These trusts build up a protective wall, sheltering the inheritance from your child’s creditors and future spouse.
Trustee: The Trustee is the person who manages your child’s trust. Typically, the Trustee works with the Guardian to pay for the child’s expense until age 18, when the Trustee collaborates with the child. The Trustee’s powers can be crafted to address your specific requirements.
Protector:. The Protector provides a check to the Trustee’s power. The Protector can remove and replace the Trustee without court approval.
Temporary Guardianship Document: If you have not died, then your Will has no power. If you become incapacitated, a separate document appoints a Temporary Guardian who steps in to make medical decisions and takes custody of your child until you recover. For example, if you are in a car accident causing a coma, this Temporary Guardian can authorize the doctors to treat your child, and this is the person who takes your child home from the hospital.
Babysitter Medical Authorization: When both parents are unavailable, this document authorizes the caregiver to approve your child’s medical care.
Irrevocable Trust: A Trust can be created for your child while you are alive. An Irrevocable Trust is an excellent tool to protect assets from creditors, keep assets separate from your spouse’s assets, reduce estate and inheritance taxes and remove property that might cause a dispute between your spouse and children at your death. Irrevocable Trusts address many different situations.
If you have any questions about estate planning for the arrival of new child or any other estate planning topics, Please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate planning techniques clearly and concisely. We make it easy for you to understand estate planning for your growing family so you can make the best decisions.