Kids Protection Planning
Photo —PROTECTING YOUR MOST VALUABLE ASSET
For parents (or grandparents) of young kids, your estate planning needs to include a foundation that ensures your children will be taken care of if you are not there for them.
In the event of parents’ severe illness, injury, or death—estate planning tools should be put in place to make sure your children are raised by the persons of your choosing, and that your child’s financial, emotional and spiritual needs will be met.
Without proper kids protection planning, among which is properly naming of a guardian, your kids may face a number of serious and traumatic issues:
–being placed in child protective services,
–having a judge( who does not know you or your family) appoint a guardian who you may not want to raise your children,
–having your estate value eroded by enormous and unnecessary probate costs
–having large amounts of money turned over in a lump sum to your children the day they turn 18(an age at which most kids, to say the least, will want to spend, not save for future needs
Our law office specializes in protecting young families and their kids. Unlike some estate planning attorneys who fail to address many of these important kids protection issues, you can enjoy the peace of mind of knowing we have addressed these vital issues—maximizing protection for your kids.
Some of the common tools used in the kids protection plan:
Short-term and long-term guardianship appointment
Simple Will/Revocable Living Trust
Life Insurance Trust
Special Needs Trust
COMMON MISTAKES MADE IN APPOINTING GUARDIANS
Even those who have named a guardian for their kids may have made some of these following mistakes:
Failing to name enough alternate guardians(especially if those named are older, or may move out of the area)
For those who name a couple as their guardian, failing to specify what is to happen if they divorce or one spouse dies
Neglecting to sufficiently consider the financial responsibilities/financial resources regarding your potential guardians. It is advisable to ensure you can leave some financial resources—whether it be assets or through a life insurance policy—to cover the costs for the guardians of raising your children. The guardians–who are responsible for raising your kids—their emotional, physical and spiritual well-being—can also manage assets left for the children’s care, or you can name a financial trustee to manage the financial side.
Failing to create a trust, and have someone there to manage the money you have left your kids, including when they turn 18, so that they do not get a lump sum payout at an age in which most are not capable of responsible money management.
Failing to expressly exclude those people, especially relatives, who you would strongly oppose having a role in raising your kids