Going on vacation entails lots of planning: packing luggage, making travel arrangements, holding mail, etc. But one thing many people forget to do is plan for the worst. Traveling, especially in foreign destinations, means you’ll likely be at greater risk than usual for illness, injury, and even death.

In light of this reality, you must have a legally sound and updated estate plan in place before taking your next trip. If not, your loved ones can face a legal nightmare if something should happen to you while you’re away. The following are 5 critical estate planning tasks to take care of before departing.

1. Make sure your beneficiary designations are up-to-date
Some of your most valuable assets, like life insurance policies and retirement accounts, do not transfer via a will or trust. Instead, they have beneficiary designations that allow you to name the person (or persons) you’d like to inherit the asset upon your death. It’s vital you name a primary beneficiary and at least one alternate beneficiary. Moreover, these designations must be regularly reviewed and updated, especially following major life events like marriage, divorce, and having children.

2. Create power of attorney documents
Unforeseen illness and injury can leave you incapacitated and unable to make critical decisions about your own well-being. Given this, you must grant someone the legal authority to make those decisions on your behalf through powers of attorney. You need two such documents: a medical power of attorney and a durable financial power of attorney. The medical power of attorney gives the person of your choice the authority to make your healthcare decisions for you, while the durable financial power of attorney gives someone the authority to manage your finances. As with beneficiary designations, these decision makers can change over time, so before you leave for vacation, be sure both documents are up to date.

3. Name guardians for your minor children
If you’re the parent of minor children, your most important planning task is to legally document guardians to care for your kids in the event of your death or incapacity. These are the people whom you trust to care for your children—and potentially raise them to adulthood—if something should happen to you. Given the monumental importance of this decision, we’ve created a comprehensive system called the Kids Protection Plan that guides you step-by-step through the process of creating the legal documents naming these guardians. You can get started with this process right now by calling us or attending one of our free Guardian Nomination Workshops (our next one is at the Sierra Madre Public Library on May 4, 2019).

4. Organize your digital assets
If you’re like most people, you probably have dozens of digital accounts like email, social media, cloud storage, and cryptocurrency. If these assets aren’t properly inventoried and accounted for, they’ll likely be lost forever if something happens to you. At minimum, you should write down the location and passwords for each account and ensure someone you trust knows what to do with these digital assets in the event of your death or incapacity. To make this process easier, consider using LastPass or a similar service that stores and organizes your passwords.

Complete your vacation planning now
If you have a vacation planned, be sure to add these 5 items to your to-do list before leaving. And if you need help completing any of these tasks—or would simply like us to double check the plan you have in place—call us and mention this article for a friendly, informative, no-pressure, complimentary consultation.

We recommend you complete these tasks at least 8 weeks before you depart. However, if your trip is sooner than that, call and let us know you need a rush Family Estate Planning Session, and we’ll do our best to fit you in as soon as possible.

Dedicated to empowering your family, building your wealth and defining your legacy,

Upon death, if you have individual retirement accounts (IRAs), they will pass directly to the people you named on your beneficiary designation form. And unless you take extra steps, the named beneficiary can do whatever he or she wants with the account’s funds once you’re gone.

For several reasons, you might not want your heirs to receive your retirement savings all at once. One way to prevent this is to designate your IRA into a trust.

But you can’t just use any trust to hold an IRA; you’ll need to set up a special type of revocable trust specifically designed to act as the beneficiary of your IRA upon your death. Such a trust is referred to by different names but for this article, I’m simply going to call it an IRA Trust.

IRA Trusts offer a number of valuable benefits to both you and your beneficiaries. If you have significant assets invested through one or more IRA accounts, you might want to consider the following advantages of adding an IRA Trust to your estate plan.

1. Protection from creditors, lawsuits, & divorce
Assets passed through an IRA Trust are shielded from your beneficiary’s creditors (which includes lawsuit judgements) if those assets remain in the trust.IRA Trusts are also useful in protecting assets from the possible remarriage and divorce of a surviving spouse as well as potential future divorces of your children.

2. Protection from the beneficiary’s own bad decisions
In addition, an IRA Trust can also help protect the beneficiary from his or her own poor money-management skills and spending habits. When you create an IRA Trust, you can restrict when the money is distributed as well as how it is to be spent. For example, you might stipulate that the beneficiary can only access the funds at a certain age or upon the completion of college. Or you might stipulate that the assets can only be used for healthcare needs or a home purchase. You can get as creative as you want with the trust’s terms.

3. Tax savings
One of the primary benefits of traditional IRAs is that they offer a period of tax-deferred growth, or tax-free growth in the case of a Roth IRA. A properly drafted IRA Trust can ensure the IRA funds are not all withdrawn at once and the required minimum distributions (RMDs) are stretched out over the beneficiary’s lifetime. Depending on the age of the beneficiary, this gives the IRA years—potentially even decades—of additional tax-deferred or tax-free growth.

4. Minors
If you want to name a minor child as the beneficiary of your IRA, they can’t inherit the account until they reach the age of majority. So, without a trust, you’ll have to name a guardian or conservator to manage the IRA until the child comes of age. With an IRA Trust, however, you name a trustee to handle the IRA management until the child comes of age. At that point, the IRA Trust’s terms can stipulate how and when the funds are distributed. Or the terms can even ensure the funds are held for the lifetime of your beneficiary, to be invested by your beneficiary through the trust.

Find out if an IRA Trust is right for you
While IRA Trusts can have major benefits, they’re not the best option for everyone. We can look at your situation and goals to help you determine if an IRA Trust is the most suitable option for passing on your retirement savings to benefit your family.

Dedicated to empowering your family, building your wealth and defining your legacy,

Last week, I discussed how a lack of intimacy in the parent-child relationship has led kids to bond more intensely with their peers. Here, I’ll look at the devastating effects these peer-centered relationships can have, and how parents can reclaim their role as the chief-orienting influence in their children’s lives.

The crisis of the young
For evidence of just how unhealthy it can be when a child’s relationship with his or her peers matters more than the one they have with their parents, Maté points to the dramatic rise in violence, suicide, and mass shootings among today’s youth.

Maté found that in the vast majority of childhood suicides, the key trigger was how the children were treated by their peers, not their parents. When kids consider acceptance from their peers as their primary source of fulfillment, rejection and bullying can be utterly Earth-shattering.

“The more peers matter,” says Maté, “the more children are devastated by the insensitive relating of their peers, by failing to fit in, by perceived rejection or ostracization.”

The missing element
Outside of the obvious reasons why peers make terrible parenting substitutes, the crucial element missing from peer relationships is unconditional love.

Unconditional love is the most potent force in the parent-child bond, laying the foundation for the relationship’s strength, intimacy, and influence. Without unconditional love, the parenting relationship becomes no different than any other.

Maté notes that some of today’s common disciplinary techniques can unintentionally signal to the child that parental love is only available if certain conditions are met. As an example, Maté explains how putting a child who’s throwing a tantrum into timeout can make it feel like the parent’s attention and love are merely conditional.

“Timeout withdraws your relationship from the child,” says Maté. “They learn they’re only acceptable to you if they please you. The relationship is seen as unstable and unreliable because it’s showing them you’re not available for them when they’re most upset.”

Maté says that any behavior or action by the parent that threatens to undermine the unconditional nature of the parent-child relationship can be harmful. Without the underlying trust that their parents will be there for them no matter what, a children’s primary source of safety and trust becomes a source of insecurity.

Reclaim your influence
“Our challenge as parents is to provide an invitation that’s too desirable to turn down, a loving acceptance that no peer can provide,” says Maté.

“A real relationship with kids doesn’t depend on words; it depends on the capacity to be with them,” says Maté. “Welcome their presence with your body language and energy. Express delight in the child’s very being.” And your most challenging job as a parent is to do this even when they are pushing your every button, as all kids inevitably do.

No matter how your children are behaving, consider a way to show them that they’re loved and accepted unconditionally. This may go against everything you learned from your parents but consider doing it anyway. And if you find this difficult, take Mate’s advice and think back about what you would’ve really wanted from your own parents in such a situation.

“The ultimate gift is to make a child feel invited to exist in your presence exactly as he or she is at the moment,” says Maté. “Children must know they’re wanted, special, valued, appreciated, and enjoyed. For children to fully receive this invitation, it needs to be genuine and unconditional.”

When children get this level of acceptance, they naturally desire to become closer with whomever is offering it. Rather than fearing or being threatened by their parents, children want to be with them. They want to follow them.

Dedicated to empowering your family, building your wealth and defining your legacy,

Like me, you probably spent lots of time with family and friends over the holidays. And I hope, like me, that time reminded you of just how important and special these relationships can be.

Though you might not realize it, estate planning has the potential to enhance those relationships in some major ways. Planning requires you to closely consider your relationships with family and friends—past, present, and future—like never before. Indeed, the process can be the ultimate forum for heartfelt communication, fostering a deeper bond and sense of intimacy, and prioritizing what matters most in life.

Here are just a few of the valuable ways estate planning can improve the relationships you cherish most:

1) It shows you sincerely care
Taking the time and effort to carefully plan for what will happen to you in the event of your incapacity or death is a genuine demonstration of your love. It would be far easier to do nothing and simply let you family and friends figure it out for themselves. After all, you won’t be around to deal with any of the fallout.

Planning in advance, though, shows that you truly care about the welfare of your loved ones. Such selfless concern and forethought equates to nothing less than a final expression of your unconditional love.

2) It inspires honest communication about difficult issues
Sitting down and having an honest discussion about life’s most taboo subjects—incapacity and death—is almost certain to bring you and your loved ones closer. By facing immortality together, planning has a way of highlighting what’s really important in life—and what’s not.

In fact, our clients consistently share that after going through our estate planning process they feel more connected to the people they love the most. And they also feel clearer about the lives they want to live during the fleeting time we have here on earth.

Planning offers the opportunity to talk openly about matters you may not have even considered. When it comes to choices about distributing assets and naming executors and trustees, you’ll have a chance to engage in frank discussions about why you made the choices you did. And that may just be the first step in actively addressing and healing any problems that may be lurking under the surface of your relationships.

3) It builds a deep sense of trust and respect
Whether it’s the individuals you name as your children’s legal guardians or those you nominate to handle your own end-of-life care, estate planning shows your loved ones just how much you trust and admire them. What greater honor can you bestow upon another than putting your own life and those of your children in their hands?

Though it’s often challenging to verbally express how much you love your family and friends, estate planning demonstrates your affection in a truly tangible way. And once these people see exactly how much you value them, it can foster a deepening of your relationship with one another.

4) It creates a lasting legacy
While estate planning is primarily viewed as a way to pass on your financial wealth and property, it can offer your loved ones much more than just financial security. When done right, it also lets you hand down the most precious assets of all—your life stories, lessons, and values.

In fact, the wisdom and experience you’ve gained during your lifetime are among the most treasured gifts you can give. Left to chance, these gifts are often lost forever. Considering this, our planning process includes a means of preserving and passing on these intangible assets.

We guide clients to create a customized video in which they share their most insightful memories and experiences with those they’re leaving behind. This not only ensures our clients are able to say everything that needs to be said, but that their legacy carries on long after they—and their money—are gone.

The heart of the matter
Estate planning doesn’t have to be a dreary and depressing affair. When done right, it can put your life and relationships into a much clearer focus and ultimately be a tremendously uplifting experience for everyone involved. Contact us today to learn more.

Dedicated to empowering your family, building your wealth and defining your legacy,

Template wills and other cheap legal documents are among the most dangerous choices you can make for the people you love. These plans can fail to keep your family out of court and out of conflict, and can leave the people you love most of all—your children—at risk.

The people you love most
It’s probably distressing to think that by using a cut-rate estate plan you could force your loved ones into court or conflict in the event of your incapacity or death. And if you’re like most parents, it’s probably downright unimaginable to contemplate your children’s care falling into the wrong hands.

Yet that’s exactly what could happen if you rely on free or low-cost fill-in-the-blank wills found online, or even if you hire a lawyer who isn’t equipped or trained to plan for the needs of parents with minor children.

Naming and legally documenting guardians entails a number of complexities that most people aren’t aware of. Even lawyers with decades of experience frequently make at least one of six common errors when naming long-term legal guardians.

If wills drafted with the help of a professional are likely to leave your children at risk, the chances that you’ll get things right on your own are much worse.

What could go wrong?
If your DIY will names legal guardians for your kids in the event of your death, that’s great. But does it include back-ups? And if you named a couple to serve, how is that handled? Do you still want one of them if the other is unavailable due to illness, injury, death, or divorce?

And what happens if you become incapacitated and are unable to care for your children? You might assume the guardians named in the DIY will would automatically get custody, but your will isn’t even operative in the event of your incapacity.

Or perhaps the guardians you named in the will live far from your home, so it would take them a few days to get there. If you haven’t made legally-binding arrangements for the immediate care of your children, it’s possible they will be placed with child protective services until those guardians arrive.

Even if you name family who live nearby as guardians, your kids are still at risk if those guardians are not immediately available if and when needed.

And do they even know where your will is or how to access it? There are simply far too many potential pitfalls when you go it alone.

Kids Legal Planning
To ensure your children are never raised by someone you don’t trust or taken into the custody of strangers (even temporarily), consider creating a comprehensive Kids Protection Plan®.

Protecting your family and assets in the event of your death or incapacity is such a monumentally important task you should never consider winging it with a DIY plan. No matter how busy you are or how little wealth you own, the potentially disastrous consequences are simply too great—and often they’re not even worth the paper they’re printed on.

Plus, proper estate planning doesn’t have to be a depressing, stressful, or morbid event. In fact, we work hard to ensure our planning process is as stress-free as possible.

What’s more, many of our clients actually find the process highly rewarding. Our proprietary systems provide the type of peace of mind that comes from knowing that you’ve not only checked estate planning off your to-do list, but you’ve done it using the most forethought, experience, and knowledge available.

Act now
If you’ve yet to do any planning, contact us to schedule a Family Estate Planning Session. This evaluation will allow us to determine your best option.

If you’ve already created a plan—whether it’s a DIY job or one created with another lawyer’s help—contact us to schedule an Estate Plan Review and Check-Up. We’ll ensure your plan is not only properly drafted and updated, but that it has all of the protections in place to prevent your children from ever being placed in the care of strangers or anyone you’d never want to raise them.

Dedicated to empowering your family, building your wealth and defining your legacy,

You might not be a big fan of their typical life choices, but the Kardashians recently demonstrated impressive wisdom in protecting their minor children using estate planning.

During a recent episode of Keeping Up With The Kardashians, Khloé Kardashian was preparing to give birth to her first child, daughter True. Khloé was second-guessing her initial choice to name her sister Kourtney as the child’s legal guardian in the event something happened to her or the baby’s father, Tristan Thompson.

During her pregnancy, Khloé spent lots of time with her other sister Kimberly and her family, daughters North, Chicago, son Saint, and husband Kanye West. Watching her interacting with her own kids, Khloé really connected with Kim’s mothering style and pondered if she might be a better choice as guardian.

“I always thought Kourtney would be the godparent of my child, but lately I’ve been watching Kim, and she’s been someone I really gravitate to as a mom,” Khloé said.

To make things more challenging, Kourtney always assumed she’d be named guardian and said as much. Over the years, Khloé had lots of fun times with Kourtney’s family—sons Mason, Reign, and daughter Penelope—and Kourtney thought her own passion for motherhood would make her the natural choice.

For guidance, Khloé asked her mother, Kris Jenner, how she chose her kids’ guardians. Kris’ answer was to compare how her two sisters’ raised their own children.

“You just have to think,” Kris told her. “‘Where would I want my child raised, in which environment? Who would I feel like my baby is going to be most comfortable and most loved?’”

In the end, Khloé chose Kim over Kourtney. She explained her decision had nothing to do with her respect or love of Kourtney; it was merely about which style of parenting she felt most comfortable with.

“Watching Kimberly be a mom, I really respect her parenting skills—not that I don’t respect Kourtney’s, I just relate to how Kim parents more,” said Khloé. “I just have to make the best decision for my daughter.”

 Khloé’s actions are admirable for several reasons. First off, far too many parents never get around to legally naming a guardian to care for their children in the event of their death or incapacity. Khloé not only made her choice, but she did so before the child was even born.

Khloé also took the time to speak and spend time with her sisters beforehand, so the family understood the rationale behind her decision. Khloé was lucky her choices were close family members, so she had ample opportunity to experience both of their parenting styles.

Depending on your life situation, you might not be able to spend that much time vetting your choice. But at the very least, you should sit down with each of your top candidates to openly and intimately discuss what you’d expect of them as your child’s new parents.

Dedicated to empowering your family, building your wealth and defining your legacy,

Last week, I shared the first part of this series, discussing some of the key steps for conscious co-parenting. In part two, we continue with the final steps.

Conscious co-parenting after divorce is a child-centered process, where both you and your ex-spouse agree to work as cooperative partners for the sake of your kids. This ultimately helps both you and your children adapt in a healthier way.

Such collaboration can be challenging, but last week I offered three ways you can successfully navigate the process. Here  are three additional ways to make conscious co-parenting work for you:

 4. Respect your co-parent’s time with the children

Conscious co-parenting is about demonstrating to your children that you still want the other parent in their lives.

It’s normal to miss your children when they’re away, but it will be easier and healthier for everyone if you don’t do anything that might stop your kids from having an enjoyable time when they’re with the co-parent. This means not scheduling children’s activities during the co-parent’s time, unless you’ve asked them first. It also means respecting their time together by not constantly calling or texting.

 5. Get outside support

When it comes to divorce, the experience is often painful and unsettling. The underlying emotions can be overwhelming if they aren’t processed properly, which can have negative effects on your parenting skills.

Given this, it’s crucial you have support systems in place to move through this phase of life. There’s no single solution, so try a few different supportive outlets to find the one(s) that most suit you.

Whether it’s therapy, support groups, trusted confidants, and/or meditative solitude, you should take this opportunity to practice self-care. For better or worse, our personal identities are often largely centered around our marriages, so it’s perfectly natural to go through a grieving process when they end. Just don’t let the grief become what defines you.

6. Use conscious co-parenting to achieve personal growth
While it may sound paradoxical, divorce can offer a perfect opportunity for personal growth. The steps discussed here can help you adjust to your new life in divorce’s immediate aftermath, but they can also allow you to better express yourself throughout your life overall.

Consciously choosing a cooperative co-parenting relationship is just the beginning. You can bring the same mindful focus to every other area of your life. Treating your co-parent in a compassionate, respectful, and patient manner can provide the foundation for how you deal with all of life’s relationships and circumstances.

By doing this, you can serve as a role model for your children, demonstrating how they can deal with adversity in their own lives. In fact, conscious co-parenting can provide them with an array of vital skills that will strengthen their ability to endure the trials and tribulations they’re likely face in the future.

From custody agreements to alimony payments, there are numerous legal issues that can arise when co-parenting, so be sure you have the legal support you need. And given the fact that your family structure has changed, you’ll want to update your estate plan as well. Please contact us today if we can be of any assistance.

Dedicated to empowering your family, building your wealth and defining your legacy,

mother with son doing homework
It’s back-to-school time again, and when it comes to estate planning YOU may have homework to do. As a parent, your most critical—and often overlooked—task is to select and legally document guardians for your minor children. Guardians are people legally named to care for your children in the event of your death or incapacity.

If you haven’t done that yet, you should immediately do so – or come to one of our “Guardian Naming Workshops” and get it done there. Information on our next workshop can be found here.

Don’t think just because you’ve named godparents or have grandparents living nearby that’s enough. You must name guardians in a legal document, or risk creating conflict and a long, expensive court process for your loved ones—all of which can be so easily avoided.

Covering all your bases
However, naming permanent guardians is just one step in protecting your kids. It’s equally important to have someone (plus backups) with documented authority, who can stay with your children until the long-term guardians can be located and formally named by the court, which can take weeks or even months.

The last thing you want is for police to show up at your home and find your children with a caregiver, who doesn’t have documented or legal authority to stay with them and doesn’t have any idea how to contact someone with such authority. In such a case, police would have no choice but to call Child Protective Services.

Closing the gap
This is a major hole in many parent’s estate plans, as we know you’d never want your kids in the care of strangers, even for a short time. To fix this, we’ve created a comprehensive system called the Kids Protection Plan®, which lets you name temporary guardians who have immediate documented authority to care for your children until the long-term guardians you‘ve appointed can be notified and get to your children.

The Kids Protection Plan® also includes specific instructions that are given to everyone entrusted with your children’s care, explaining how to contact your short and long-term guardians. The plan also ensures everyone named by you has the legal documents they’d need on hand and knows exactly what to do if called upon. We even provide you with an ID card for your wallet and emergency instructions to post on your refrigerator, so the contacts and process are prominently available in case something happens to you.

A foolproof plan
With the Kids Protection Plan®, you’ll name one permanent guardian and one temporary guardian, along with two or more backups, in case the primary isn’t available or cannot serve. And we instruct caregivers to NEVER CALL POLICE IF YOU CANNOT BE REACHED UNTIL ONE OF THE NAMED GUARDIANS ARRIVES AND IS PRESENT WITH YOUR CHILDREN.

Finally, if there’s anyone you’d never want raising your children, we confidentially document that in the plan, preventing them from wasting the time, energy, and assets of the people you do want caring for your children.

With us as your personal family lawyer, you have access to the Kids Protection Plan® to ensure the well-being of your children no matter what. As your kids head back to school, do your homework by contacting us today.

Dedicated to empowering your family, building your wealth and defining your legacy,

child and woman 91024

 

 

 

 

 

 

Putting politics aside, I imagine every parent who has watched the news lately has been troubled over what’s happening to families at the US-Mexican border. As you likely know, more than 2,300 children have been separated from their parents at the border recently.

Again, regardless of your political views, I’m sure you don’t relish the thought of children being taken from their parents. What’s more, perhaps these events have got you thinking about how it would be for your children to be taken into the custody of strangers. And if not, let this be the moment you willingly feel that fear on a personal level and decide to ensure your child’s well-being and care by only the people you want no matter what happens.

It can happen to your family
Even though most people think that something like that could never happen to their family, they’re just plain wrong. While your kids almost certainly won’t be taken into custody by U.S. border agents, your children could be taken into the care of strangers if something happens to you—even if your family or friends are on the scene.

Understand the risk
While it may seem like a long shot, the consequences are serious enough that you must consider the real possibility of what could happen and ensure you’ve taken right actions to protect your loved ones. Let’s say you and your spouse have gone out to dinner together and left the kids with a babysitter. But on the way home, you’re in a car accident. The police will get to your house, find your children home with a babysitter, and have no choice but to take your kids into the care of the authorities (strangers) until they can figure out what to do.

This is the case even if you have friends or family living nearby. If you haven’t left proper legal documentation, the authorities may have no option but to call child protective services—that is, unless you’ve legally given them an alternative.

Know your options and your responsibility
The sad thing is, this all can be completely (and very easily) prevented. However, to ensure your children are never taken into the care of strangers you must take action now. Please do not leave this to chance. You have the right – and the responsibility – to guarantee your children are never taken into the care of strangers.

And if you think you’ve already done the right thing because you’ve “asked” someone to look after your children if something happens to you, or you have a will that names legal guardians for your children, think again. We’ve found that in most cases, even parents who worked with a lawyer to name legal guardians have made at least one of six common mistakes that leave their children at risk.

These mistakes are made because unfortunately, most lawyers do not know what’s necessary for planning and ensuring the well-being and care of minor children.

Here’s how to get started
If you’ve already created a will, we can help you identify whether you’ve made any of the six common mistakes that could leave your children at risk. If you have not yet taken any action, we can help you take the first steps and make the very best decisions for the people you love.

Whatever your situation, you should act now to make certain your children are never taken into the care of strangers. Call us and mention this article to receive a complimentary consultation.

Dedicated to empowering your family, building your wealth and defining your legacy,

Marc Garlett 91024

young-family 91024Deciding on a guardian for your minor children may very well be the most important decision you’ll make regarding your estate planning. Not only must you trust the appointed guardian to raise your children as you’d want them raised, but you also need that person to be financially responsible with your children’s inheritance. For example, if you have an IRA or an annuity that you wish to pass to your minor children, how can you ensure those funds will be used properly—especially if the person you trust most to raise your kids isn’t necessarily the best with finances?

This question is multifaceted, so let’s unravel one aspect at a time.

The Question of Guardianship

Here’s the good news: The person who raises your minor children and the person who handles their inheritance don’t have to be the same person. If necessary, you can appoint one guardian to serve each function, naming one as the guardian of the person and another as the guardian of the estate. In this arrangement, you entrust one person with your children’s assets and another with their care, while enabling each to interact with the other. This dual guardianship model gives many parents peace of mind—knowing they don’t necessarily have to risk their children’s inheritance while ensuring that they are raised according to the family’s values.

Although guardianship of the estate is an option, for many families the best strategy for financially providing for the children is to use a trust. In that case, a trustee fulfills the responsibility that would otherwise belong to the guardian of the estate. The trust assets can be released to the children or the caregiver incrementally according to age and needs. For example, the trustee could distribute money for the children’s needs until age 18 and then manage for the money until the child is a financially mature adult. Your trustee may also exercise discretion in investing and distributing the funds for the children’s support, education, etc., coordinating with their physical guardian to ensure the children’s needs are met until they come of age. This can ensure that the assets are there when they’re needed for your family.

Passing an Annuity to the Children

Annuities pay out regular income—which can make them convenient vehicles to cover ongoing expenses for minor children. If you have set up an annuity for yourself or a spouse, you can name the children as beneficiaries, or you can also name a trust for the benefit of your children. If you are still paying into the annuity at the time of death, your children may receive the balance, or you may give a trustee the option of rolling the balance into another annuity to be paid out to the children at a later maturity date. If you are already receiving annuity payments yourself, the children may simply continue receiving these payments for the remainder of the term. Depending on your annuity contract, payouts may also be made lump sum. Annuities are a very flexible financial product with many different options. If you have annuity now, or if you are considering purchasing one, bring it up with us as we work on your estate plan so we can make sure it meshes with your will or trust seamlessly.

Transferring an IRA to the Children

Individual Retirement Accounts (IRAs) are also excellent vehicles to pass along wealth for minor children’s welfare—because, unlike most annuities, they have the ability to grow over time and can provide a lifetime of financial benefit to your children.

When you name the next generation as beneficiaries on an IRA, you effectively extend the IRA’s life expectancy. While the required minimum distribution payments to the children will be smaller than they would have been for you (since, according to the IRS’s rules, they have a longer life expectancy), the account balance can remain invested for growth over time. Your financial and tax advisor can evaluate your situation to help you decide which type of IRA (Roth or traditional) is the best option for your goals. And we can work with you to set up a trust which fully protects your IRA against your child’s creditors, predators, future ex-spouses, and immature financial decision making.

Planning for the welfare of minor children after your death is neither simple nor pleasant to consider, but it’s absolutely necessary for peace of mind. Determining the right person(s) to be the guardian of your children requires careful thought, but you don’t have to sacrifice your children’s inheritance for their proper care. With the right financial plan, you can manage both facets successfully. As always, we’re here to provide assistance and explain your options. Call our offices for an appointment today.

Dedicated to building your wealth, empowering your family and securing your legacy,

Marc Garlett 91024