When you have young children or a new baby on the way, the last thing most couples want to think about is their estate plan. But for new parents, drafting a well-thought-out estate plan is one of the best things you can do to make sure your child’s future is secure.
Protecting your children’s future
The idea of creating an estate plan for the possibility of your death is not something new parents want to think about, but here are some considerations that could be helpful when drafting a will with young children in mind:
- Guardianship: For young children, the decision about who should raise your children can be a challenging one. You want to choose a person that you trust and who agrees to take on the responsibility of raising your children. Many parents prefer to select someone who shares similar values with your family. You have to consider that this person will oversee their education, raise them with a similar parenting style, and provide for the spiritual development of your children the way you want them to be brought up. It helps to choose someone with a stable, substantial income, but you should make additional provisions for how your children will be taken care of financially.
- Trusts: By creating trusts for your children, you can make sure that in the event of your death, there are funds immediately available for them. Trusts can help avoid the probate process, streamlining the process of distributing your assets to your children. These funds can also be set aside for minor children until they reach a certain age. A special needs trust might be necessary for a child that requires ongoing care and possible assisted living residency. Educational trusts can set money aside for a child’s private schooling, college tuition and even graduate school. Some grantors set up a trust manager who is different than their children’s guardian to manage their finances to prevent any conflicts of interest between the guardian and the children.
- Executor: The executor of your will is the person who will oversee the payment of your debts, filing of tax returns and then selling properties when necessary, and distributing your assets amongst the named beneficiaries. Additionally, there is an inheritance tax in Pennsylvania of 4.5% to direct descendants. You want someone who is up to the task and will keep your family’s best interests at heart by maintaining the privacy of your estate in order to protect the interests of your beneficiaries.
Having a plan in place for the worst-case scenario
You hope that nothing will ever happen to you and your spouse while your children are young, but if something catastrophic does happen, you want to have a viable estate plan in place. If you’re considering drafting an estate plan for a large or complex estate, contact an attorney who specializes in estate plans to guide you through this complicated process.