Planning for Young Families
Let’s face it. We make decisions about our families everyday. Some of them more routine: Who has time to make a trip to the grocery store? Some of them more difficult: Should we refinance the house? Having a conversation with your spouse about setting up an Estate Plan for your family can be one of those more difficult conversations. While talking about death and disability are tough topics for a person of any age, I find that they can be especially difficult for younger adults. Simply put, for many of them such a discussion may seem far too premature to warrant thinking about.
However, it can also be one of the more empowering discussions you and your spouse can have. You both work hard every day to ensure that your family is better off today than they were yesterday. An Estate Plan is a continuation of that process. It allows you and your spouse to memorialize your wishes on how you want to care for each other and your children in the years to come.
What are the Benefits for Younger Families having an Estate Plan?
- Having a Will allows you to avoid the rigid Maryland intestacy laws and your children’s inheritance having to be overseen by a Court.
If you die without a Will, your estate is split between your spouse and your surviving children. Further, if the child is under the age of eighteen, their inheritance will have to be supervised by a court appointed guardian. The prospective guardian, even if it is their parent, still needs to be appointed by a judge. Further, any withdraws from the minor’s account typically must be approved by the Court. Lastly, once the child turns eighteen, the funds pass directly to them. As most eighteen year olds are not as fiscally responsible as an adult, this too can be far from what you wanted for your child.
- A Will can provide flexibility and can be tailored to your personal situation
An Estate Plan allows you and your spouse to provide for the support of each other and your children on your terms. For example, you could design a system of trusts for your children’s inheritance. The trusts could provide for their education and support but also designate when they receive their inheritance. For example, the trust could provide that they receive the first half of their inheritance when they turn twenty-one and the second half of their inheritance when they turn thirty. This way you can better ensure that your child is fiscally mature enough to make responsible decisions regarding their inheritance.
- A Will allows you and your spouse to select a guardian for your young children
One of the most frightening prospects facing a young family is the possibility of both parents dying while their children are still young. In such a tragic instance, who raises your children? An Estate Plan allows you and your spouse to select individuals you trust to take on this responsibility. Without the proper provisions in your Estate Plan, judicial intervention is required. Sometimes, the children are required to testify in court as to who they wish to live with. Ultimately, the judge will make this determination. Without proper planning, parents have no guarantee that the individuals they trust will be the ones ultimately entrusted with their children’s care.
What if things change?
A young family may also be concerned about making an Estate Plan today when they expect their young family to change in the years to come. What if I have children after I execute my Estate Plan? Are they left out of my Will? What if my spouse and I make much more money in the future? What if we later acquire assets that we wish to give to a particular person? Won’t any one of these aspects render an estate plan I execute today as ineffective in the years to come?
- An Estate Plan flexible enough to handle most changes
As a general matter, it is always good to review ones’ Estate Plan every few years. However, a properly crafted Estate Plan should not only be tailored to your own particular family dynamics today, but it also should be highly flexible to address future changes. It should be designed to address most of the common changes in ones’ family (such as the addition of a new child). Similarly, it should also provide flexibility to address the likely increase in a young family’s wealth.
- What if I need to make changes?
Secondly, changing ones’ estate plan typically does not require the creation of an entirely new estate plan. For example, assume that after you executed your Estate Plan you begin collecting antiques. As one of your children has a greater interest in the collection, you wish to leave them it as a gift under your Will. This change can be done by executing what is called a “Codicil.” A Codicil is a short addition to your Will which maintains all of the original provisions in your Will but also allows you to add new ones. Just as fixing your car is typically far less expensive than buying a new one, so too can be updating your estate plan.
Conversations about your Estate Plan can be difficult – especially for younger individuals. However, when it comes to providing for your family’s long term care, they are essential conversations to have. Contact me today for a free one hour consultation on how an Estate Plan can benefit you and your loved ones.