Why Should Young Families Have An Estate Plan?
Bottom line: (1) to name a guardian for your children in the event something happens to you and your spouse, and (2) to provide a mechanism and instructions for your children’s inheritance (the money and property you leave behind) so it will be used for their benefit and in accordance with your wishes (almost always a trust).
Both are huge benefits. Without an estate plan, the court will be tasked with choosing a guardian for your kids and appointing a conservator to hold and manage their assets. A “guardian” is responsible for the personal care and wellbeing of the child; a “conservator” is responsible for their finances. Both positions are governed by the court until the child turns 18, at which point they will receive their entire inheritance.
An estate plan allows you to name who will be the guardian of your children, and who will manage their assets – it can be and usually is the same person, but it also doesn’t have to be. In addition, while an estate plan should be reviewed periodically, a quality estate plan will age well with your family. In other words, if done right, your estate plan is not something you’ll have to necessarily change as your family grows and grows up.
For example, let’s say you name your sister as trustee of your trust for your 5-year old daughter in the event something happens to you and your spouse. Someday, when your daughter is 30 and a CPA, you will likely want her to be responsible for winding things up when you’re gone. But until then, a proper estate plan should age pretty well.
If you’re interested in creating an estate plan or just want to find out more about estate planning, give my office a call at (616) 920-1932 or send us an email at firstname.lastname@example.org.