Why Having a Will is Important for All Parents
Many people believe that estate planning is only for the wealthy or the elderly. This couldn’t be further from the truth! All parents should have an estate plan in place to set forth their wishes for their children. In a Will, you can:
Name a Guardian to Care for Your Children
One of the most important things a parent can do through their Will is nominate the person they would choose to raise their children if the parent should pass away before the children reach age 18. If one parent dies, the other parent usually remains the natural guardian of the children. The laws of most states provide for parents to nominate a guardian to care for their children upon the death of both parents. One of the easiest ways to nominate a guardian is to include such a provision in your Will. If you do not nominate a guardian, a guardian will be selected according to state law and/or the Court, and unfortunately, the Court may appoint a guardian whom you would not have chosen.
Plan for the Care of the Assets Left to Your Children
For a young family, estate planning may be as simple as two Wills which contain provisions for a testamentary trust, if needed. A testamentary trust is a trust created by a Will whereby a Trustee is named to manage the children’s inheritance until they are older and mature enough to handle it themselves. The trust assets can be used by the Trustee to pay expenses to take care of the children and will be kept in trust until whatever age the parents deem best. Perhaps half of the trust would be distributed at age 25 and half at age 30, or whatever ages you choose. Without a trust, the children would receive the assets when they turn age 18, even though many 18-year olds lack the maturity to handle a large amount of money or property. A testamentary trust is not established until after the death of both spouses and there is no need to transfer any assets or in any way interrupt your current business affairs while either parent is alive.
Even if you do not have substantial assets, but you have life insurance, it is important to have a testamentary trust established in your Will and to have any life insurance proceeds paid into such trust for the minor children in the event of the death of both parents. Having the life insurance paid into the testamentary trust will prevent the children from receiving it all in a lump sum.
Name a Person to Handle the Affairs of Your Estate
In a Will, you can nominate a person to be the Personal Representative, or Executor, of your estate. You should nominate a person who knows and cares about your family and about your property. If you do not nominate a person, a Personal Representative will be selected by the Court according to state law (normally a spouse, adult child, parent, or sibling of the deceased). The nomination of a Personal Representative in your Will can save your estate time and money.
As you can see, a Will does much more than simply distribute a person’s property after their death. Having a Will is a must for anyone with children. While most parents don’t want to think about dying before their children are grown up, that possibility should be considered and an estate plan put in place to protect and provide for your children’s future in the event of your death.
If you are interested in scheduling an appointment to discuss estate planning, please contact Hedman Law Office at (605) 274-9222. We can set up an estate plan to fit your family’s needs.
- Bryan R. Hedman, Hedman Law Office