During the process of becoming new parents, most couples also become experts at planning – scheduling birthing classes, designing the new nursery, coordinating childcare. And that’s just the proverbial tip of the iceberg.
But unfortunately, one of the most important things you can do to protect your child is often overlooked: an estate plan. Here are five important considerations you need to discuss with your personal family attorney when setting up an estate plan once your new baby is born:
Guardians and trustees. Parents who delay choosing a guardian for their children often do so because they cannot agree on the “perfect” choice. Guess what? There is no perfect choice – and if you don’t choose, the courts will choose for you. You can always amend your choice later if you change your mind. When choosing a guardian or trustee, you need to think about who shares your beliefs and who will naturally be a part of your child’s life. And you need to make sure whomever you choose is willing to take on the responsibility of raising your child if you are unable to do so.
Education. The cost of college is already sky-high; can you imagine what it will be like in another 18 years? You probably want to start saving right away, either through a 529 plan or an educational trust so you can realize some tax benefits while you save.
Passing on your assets. Assets cannot pass directly to children under the age of 18, so you will need to think about setting up a trust and naming a trustee to manage the assets you would leave your children. You also need to examine your beneficiary forms for retirement accounts and insurance policies to be sure your trust is named as a beneficiary.
Avoiding probate. Probate is one of the worst things your loved ones can be forced into just after you’ve passed. Talk to your attorney about setting up a living trust so your heirs can avoid probate and your assets can pass directly to them.
Asset protection. If you have an estate of more than $10.5 million, you will want to discuss asset protection strategies that will help you minimize taxes and protect assets for your heirs.
If you’re ready to protect your children through estate planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Estate Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 626.355.4000 today and mention this article.