Naming a Guardian for your Minor Child(ren)

Naming a Guardian for your Minor Child(ren)

Parents with minor children need to name someone to raise them (a guardian) in the event both parents should die before the child becomes an adult. While the likelihood of that actually happening is slim, the consequences of not naming a guardian are great.

If no guardian is named in the parent’s will, a judge—a stranger who does not know the parents, the child, or their relatives—will decide who will raise the child without knowing whom the parent would have preferred. Anyone can ask to be considered, and the judge will select the person he/she deems most appropriate. On the other hand, if the parent names a guardian (typically via the parent’s Will), the judge will usually go along with the parent’s choice.

Choosing a Guardian

The guardian does not have to be a relative, so parents should consider and evaluate all candidates:

*    Parenting style, values and religious beliefs should be similar to their own.

*    Location could be important. If the guardian lives far away, the child would have to move from a familiar school, friends and neighborhood.

*   How comfortable with the candidates is the child now?

*   Consider the child’s age and that of the guardian-candidates. Grandparents may have the time, but they may not have the energy to keep up with a toddler or teenager. An older guardian may become ill and/or even die before the child is grown. A younger guardian, especially an adult sibling, may be concentrating on finishing college or starting a career. If the child is older and more mature, he/she should have some input into this decision.

*   How prepared emotionally are the candidates to take on this added responsibility? Someone who is single may resent having to care for someone else’s children. Someone with a houseful of their own children may not want more around, or they may welcome the addition.

*   Ask the top candidates if they would be willing to serve, and name at least one alternate in case the first choice becomes unable to serve.

Raising the child should not be a financial burden for the guardian, and a candidate’s lack of finances should not be the deciding factor. The parent will need to provide enough money (from assets and/or life insurance) to provide for the child. Some parents also earmark funds to help the guardian buy a larger car or add onto their existing home, if needed.

Naming someone else to handle this money can be a good idea. Having the same person raise the child and handle the money can make things simpler because the guardian would not have to ask someone else for money, but the best person to raise the child may not be the best person to handle the money; and it may be tempting for them to use this money for their own purposes.

Naming a guardian can be a difficult decision for many parents. Keep in mind that this person will probably not raise the child because odds are that at least one parent will survive until the child is grown. By naming a guardian, however, the parent is being responsible and planning ahead for an unlikely, yet possible, situation. And parents must realize that no one else will be the perfect parent for their child, so typically this means making compromises in some areas. Finally, parents should remember that they can change their mind; in fact, parents should review and change the guardian as their child grows and if the guardian’s situation changes.

Estate Planning Mistakes to Avoid

Estate Planning Mistakes to Avoid

From time to time, it’s good to review why having a complete, up-to-date estate plan is so important. In addition to confirming our own actions, it can provide us with valuable information to pass along to friends and family who need estate planning. Here we discuss two common mistakes:

  1. Not having a plan. Every state has laws for distributing the property of someone who dies without an estate plan—but not very many people would be pleased with the results. This process is called probate. By having a plan in place, your family will be able to avoid probate when you pass away. State laws vary, but generally they leave a percentage of the deceased’s assets to family members. Non-family members will not receive any assets so it is crucial for same-sex partners and non-married partners to have a plan in place if it is your intention to provide for a partner. It is common for the surviving spouse and children to each receive a share during a probate proceeding, which often means the surviving spouse will not have enough money to live on. In addition, probate fees and costs diminish the estate. If the children are minors, the court will control their inheritances until they reach legal age (usually 18), at which time they will receive the full amount. This may be contrary to what parents prefer, who may want to have some restrictions on their inheritance until they are more mature. By having a plan in place, you make the decisions and keep your affairs private by avoiding government intervention and government involvement.
  2. Not naming a guardian for minor children. A guardian for minor children can only be named through a Will. If the parents have not done this, and both die before the children reach legal age, the court will have to name someone to raise them without knowing whom the parents would have chosen. Equally tragic would be that the minor children might end up in protective custody while the court gets around to hearing the case to nominate a guardian. By seeing me, a San Diego Estate Planning lawyer, you can have the peace of mind knowing an estate plan is in place, which includes naming a guardian, for the short term and long term, for your minor children.

Continue to read Part 2 Of This Series

Common Estate Planning Myths . . . Debunked

Common Estate Planning Myths . . . Debunked

Estate planning.  You’ve heard the phrase, but do you know what it is?  You probably have it on your list of things you should do, but you may not think it’s a priority. . . perhaps because of some of the following common estate planning myths and misconceptions.

Myth #1 – Estate planning is only for the wealthy.  There are many levels of estate planning, beginning at its most basic and continuing upward with more advanced planning as you move through different financial stages.  Regardless of whether you have a multi-million dollar estate or something more modest, you need to take steps to ensure your assets are distributed to your heirs according to your wishes.  Everyone should have a basic estate plan, which consists of a Will, Trust, Advance Health Care Directive and Durable
Power of Attorney.

Myth #2 – Only the elderly need to consider planning.  You can’t know what your future holds, so it’s important to have an estate plan in place before your “golden years,” in the event you become incapacitated or die prematurely.  If you’re unable to see to your own affairs, due to a serious accident or other health condition, a Durable Power of Attorney provides a trusted advocate with the authority to carry out your stated wishes.  Similarly, having an Advance Health Care Directive allows you to specify your wishes with respect to healthcare and life-saving treatment.  These circumstances aren’t limited to the elderly—and neither is passing away—so it makes sense for everyone to have a plan in place to provide direction to their heirs.

Myth #3 – You only need a will.  While having a will is important, it’s just one of the four corners of a basic estate plan.  If you lack the other three, your estate will have to go through probate upon your death (no trust), and your heirs won’t know what you want them to do in the event that you’re incapacitated (no Durable Power of Attorney) or facing a decision regarding life-saving treatment (no Advance Health Care Directive).  Your will needs to be supplemented with these other important vehicles.

Myth #4 – Estate planning is a one-time event.  Putting an estate plan in place is an important first step, but it must be examined and possibly changed as time passes.  You may experience life changes that cause you to revisit earlier decisions, e.g., divorce, financial windfalls or a death in the family, and your plan may also need modification based on new legislation.  It’s a good idea to review your estate plan on a regular basis to ensure it reflects your current wishes and situation.

Myth #5 – It doesn’t matter who I name as a fiduciary/successor trustee.  Au contraire, the person who fills this role has vital responsibilities with respect to your estate, so the decision on who’s best suited for it shouldn’t be made lightly.  Many people make arbitrary choices (often a spouse or child), without stopping to think about whether that person has the time and expertise required to do the job.  Your fiduciary/successor trustee should be someone you trust who has experience dealing with estate issues. . .and it doesn’t have to be a family member.  In many cases, you may be better served having a professional fiduciary.

I hope this information has debunked some of the myths and misconceptions that surround the estate planning profession.  If you don’t have a plan in place, what are you waiting for?  If you do, when’s the last time you reviewed it?

Top 10 Reasons for Estate Planning

Top 10 Reasons for Estate Planning

There are many reasons why estate planning is important for everyone, regardless of age. With the proper plan in place, you can:

1.   Protect your Loved Ones. 
Only with proper planning can you be assured that your loved ones will not be subjected to unexpected disasters due to your failure to plan.

2.  Avoid Probate. 
Without a trust, your estate will be supervised by the Probate Court and there are high legal fees associated with court control.  A Trust avoids the expensive, lengthy, emotionally draining and public probate process.

3.  Guardians for Minor Children.  
Who do you choose to raise your children if you pass prematurely? It is crucial that you name a legal guardian in your will so YOU make the decision about who will care for your children.

4.  Manage Affairs in the Event of Incapacity.
In the event that you are unable to make decisions for yourself, who will make those decisions on your behalf?  By creating a durable power of attorney and an advanced healthcare directive can you be sure that your financial and personal affairs will be handled according to your instruction.

5.  Business Planning.  
If you own a business, proper planning can ensure that the business survives and continues on in accordance with your plan.

6.  Minimize or Eliminate Estate Taxes. 
You can prevent your assets from being subject to estate tax, which will allow more of your estate to be enjoyed by your loved ones.

7.  Charitable Giving. 
You can make gifts to your favorite charity or other worthwhile causes, while potentially getting income and estate tax benefits.

8.  Provide for Spouse.  
Without a proper plan, your spouse or partner may not receive the property you intended to provide.  For example, unknowingly holding property in joint ownership with someone other than your designated recipient may have undesired results down the road.

9.  Establishing Trusts for Minor Children. 
A good plan can preserve your assets for your children’s use and prevent those inherited assets from being wasted or lost by careless habits and harmful addictions.

10.  Designate Beneficiaries. 
By creating an estate plan you have wide latitude to choose who will receive your estate, what they will receive and when they will receive it.  You may distribute among your children equally or you may choose to eliminate one or all of them.  You have complete control over your estate, rather than allowing the legal system to do it for you.

8 Estate Planning Things to Do before you Travel

8 Estate Planning Things to Do before you Travel

Before any trip, most of us create a “to-do list” of things we have put off and want to take care of before we leave. Here is a checklist of estate planning things to do before you take your next trip. Taking care of these will help you travel with peace of mind, knowing that if you don’t return due to serious illness or death, you have made things much easier for those you love.

1. Have your estate planning done. If you have been procrastinating about your estate planning, use your next trip as your deadline to finally get this done. Be sure to allow adequate time to get your estate plan completed in advance of your trip.

2. Review and update your existing estate plan. Revisions should be made any time there are changes in family (birth, death, marriage, divorce, remarriage), finances, tax laws, or if a trustee or executor can no longer serve. Again, be sure to allow enough time to have the changes made.

3. Review titles and beneficiary designations. If you have a living trust and did not finish changing titles and/or beneficiary designations, now is the time to do so. If a beneficiary has died or if you are divorced, change these immediately. If a beneficiary is incapacitated or a minor, set up a trust for this person and name the trust as beneficiary to prevent the court from taking control of the proceeds.

4. Review your plan for minor children. If you haven’t named a guardian who is able and willing to serve and something happens to you, the court will decide who will raise your kids without your input. If you have named a guardian, consider if this person is still the best choice. Name a back-up in case your first choice cannot serve. Select someone responsible to manage the inheritance.

5. Secure or review incapacity documents. Everyone over the age of 18 needs to have these: 1) Durable Power of Attorney for Heath Care, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) HIPPA Authorizations, which give written consent for doctors to discuss your medical situation with others, including family members.

6. Review your insurance. Check the amount of your life insurance coverage and see if it still meets your family’s needs. Consider getting long-term care insurance to help pay for the costs of long-term care (and preserve your assets for your family) in the event you and/or your spouse should need it due to illness or injury.

7. Organize your accounts and documents. It used to be that we could just point to a file cabinet and say everything was “in there.” But now so much is done online that there may not even be a paper trail. Make a list of ALL of your accounts, where they are located, and the user names and passwords, then review and update it before each trip. Print a hard copy in case your computer is stolen or crashes and let someone you trust know where to find it. Clean up your computer desktop and put your financial and other important files where they can be easily found. Make a back-up copy in case your computer is stolen or crashes, and let someone know where to find it. Be sure to include on your master list any passwords that might be needed to access your computer and files.

8. Talk to your children about your plan. You don’t have to show them financial statements, but you can discuss in general terms what you are planning and why, especially when any changes are made. The more they understand your plan, the more likely they are to accept it—and that will help to avoid discord after you are gone.