Estate Planning for Young Parents
Parents of young children often overlook the need to plan for death or disability. Many believe they don't have enough assets yet. Some parents believe that anything they have will automatically go to their spouse. This is not always the case. Every young parent needs basic documents – a Will, Financial Power of Attorney and Health Care Power of Attorney so your wishes will be formalized in a variety of unexpected circumstances.
Young family estate planning ensures that should anything happen to you, your family will continue to thrive and reach their full potential. Here's why we recommend estate planning for young families.
What Happens Without an Estate Plan
• If one spouse dies, any assets that were in the husband's or wife's name alone will be subject to the State of Texas deciding who receives which assets. If State Law requires a child to receive the asset and if the child is a minor, then a trust will probably be established to control the asset and the State of Texas will decide who is the Trustee of the Trust.
• If both parents die in a common disaster without a Will, the courts will decide on a legal guardian for the children, where they will live and who will manage the money for them. Ready or not, any remaining funds would be turned over to the children by law at age 18.
• If your spouse becomes disabled, and you don't have a Financial Power of Attorney and a Health Care Power of Attorney for them, here's what happens –you may have to petition the court to be appointed as your spouse's legal guardian to handle their legal and financial affairs (such as selling or refinancing the house or drawing funds from their accounts) or to make healthcare decisions on their behalf, including terminating life support should the need arise. Worse, the court may decide against you as legal guardian and appoint someone else.
Benefits of Estate Planning With Young Children
• Ensures that all of your spouse's assets go to you if your spouse dies unexpectedly.
• Allows you to choose the legal guardian for your children, specify how your assets will be used for them, and at what age they will receive the remaining assets.
• Avoids guardianship proceedings should your spouse have a disabling accident or illness and provides the legal documents you will need to handle your spouse's legal, financial and medical affairs.
"Special Needs" and Other Situations
An estate plan is especially important for families with children who have special needs, single and divorced parents and blended families. All of these issues require specific provisions to help the families handle the transfer of assets. Without an estate plan, you have no control on how the assets will be transferred.
Paul B. Owens is an attorney practicing in the areas of Probate and Estate Planning law. He serves in a number of other capacities, including on the Board of Directors for the CASA Helotes
Senior Center in Helotes Texas. He can be reached at his office in Helotes at 210-695-5110 or at www.PaulOwensLaw.com