Parents with minor children MUST have the proper planning in place. I have heard and had to deal with a number of nightmare situations where the proper planning was not in place. Here are a few important items to take care of and why. Thanks to estate planning specialist Michael Lichterman for the idea and information.
Establish guardianship for your children under 18 – not doing so will leave their care up to a court to decide. Someone who doesn’t know you and what’s important to you, your family dynamics, and your desires for your children’s future, will be the one making the decision who will raise them.
Establish temporary guardianship for your children – not doing so could leave them in the hands of child protective services or temporary/permanent foster care.
Make sure you have a comprehensive emergency plan for your children so your babysitter, family, friends and guardians/temporary guardians know what to do if something happens to you and have the legal documentation to prove it. We include instructions for these important people and even include a family emergency ID card for your wallet/purse.
Have your estate structured so your kids don’t succumb to “lottery winner syndrome” when they receive all of their inheritance outright at 18 years old. Think about that for a second. Let’s take an example: 2 children and an estate valued at $500,000 (and remember life insurance is included in the amount they receive). Each child will receive whatever amount of their $250,000 share is not used up by the time they are 18. Can you imagine? Let’s say that ends up being $100,000. How would you have handled $100,000 when you were 18? I know how I would have handled it and it’s not pretty. I read one study that said over half of outright inheritances are spent within 3 years of receiving them – no matter how much was received.
If you are a professional and subject to potential liability, make sure you structure your plan in a way that ensures your assets are there to benefit your kids and not lost to lawsuits, creditors and other liabilities.
Make sure you pass on your “whole family wealth,” not just your money. This includes your values, insights, storis and experiences – who you are and what is important to you. In my experience this is THE most overlooked part of estate planning. It happens to be one of the most fulfilling privileges I have when working with families.
Have a health care directive (patient advocate designation) in place for yourself and your children to minimize conflict about your medical care.
Great information! I’ve been looking for something like this for a while now. Thanks!
What a great resource!