Having a child is an exciting time. Expecting parents spend an incredible amount of time and money preparing for a new birth or adoption. Choosing a name, preparing the child’s room, purchasing clothing, diapers and the plethora of “accessories” you will need for a new child only seem to be the tip of iceberg. So why do parents avoid making one of the most important steps in preparing for a new child: creating or updating an estate plan? For many, it seems like a daunting task and no one wants to think about his/her death at a time like this. Nevertheless, estate planning is a caring act that you do for your family. Estate planning attorney Chris Cox makes this process much easier than you might think.
If you do not have estate planning documents in place, Missouri law will take over and dictate who will care for your child as well as how your assets will be distributed, and you may not like the results. Here are important considerations for expecting parents:
- Create a Trust and/or Will to provide for your minor child(ren).
Without a trust or Will, a default state law dictates how your assets will be divided. Your assets could be tied up in an expensive Probate Court process and then placed in your children’s hands when they turn 18 - - usually not the best age for acquiring a large amount of money. A Will or Trust allows you to decide who gets your assets, and most importantly, when they get them. May people spread out gifts to children over time to allow them to mature (e.g., 1/3 at age 25, 1/3 at age 30 and 1/3 at age 35). Trusts are very common these days as they avoid the expensive and time-consuming Probate Court process, and your assets can pass to your heirs on an expedited basis. Attorney Chris Cox will discuss the various options available to you and will answer any questions that you have.
- Update your beneficiary designations. As part of your estate plan, any beneficiary designations, PODs or TODs will need to be updated and integrated together with your plan. Beneficiary designations can be used on real estate, bank accounts, cars, stock accounts, and retirement plans to seamlessly tie together your estate planning objectives and avoid certain assets from going through Probate Court. But, there are some pitfalls in naming beneficiaries directly on assets that you should discuss with our office, and allow us to advise you on the best approach.
- Name a guardian.
If both of your child’s parents unexpectedly pass away before her or she is 18 years old, the court will need to appoint a legal Guardian to raise and care for your child. A guardian has the legal authority to act on your’ child’s behalf. A properly drafted Will is the only place where you can nominate who you’d like to see appointed as such Guardian. You can also name backups if that person is unable to act. The alternatives could be relatives fighting over this role or a court-appointed Guardian that your child doesn’t even know. Telling someone your wishes is not sufficient - - your wishes must be formally documented in your Will.
- Create a Power of Attorney.
Any good estate plan will also include a Power of Attorney. This document allows the person you appoint as your Agent to manage your assets for you should you become incapacitated. It will allow that Agent to continue to provide financial assistance and support for your family, particularly the raising of your children.
We offer a free consultation and welcome the opportunity to speak with you about your specific goals as a new or soon to be new parent. We encourage you to ask questions and learn how preparing or updating an estate plan is one of most important things you can do in preparation of a new child. You’ve put so much into preparing for the arrival of your child, why wouldn’t you ensure you prepare for your child’s future should something happen to you? Schedule a free consultation online or call our office at 314-727-0163.