You have been meeting your goals both professionally and personally. Remember right after you finished college and got married, you and your spouse started out on a beautiful journey. You formed joint bank accounts and found the perfect starter home to begin filling with children. Having an estate plan wasn’t your top priority at the time, but you and your spouse did a simple plan because you knew it was important. Ten years later, your situation has drastically changed and with that change you should look to update your estate plan to ensure your growing family and assets are protected.
Consider the following when working on your new estate plan:
Trusts for minor children: If something were to happen to you and your spouse, naturally you want your assets and property to pass to your children. But due to their age, they may not be able to inherit or properly manage the property that you have left for them. Having a trust for your children in the event of your death can allow you to name persons that you want to manage the property for your children until the reach a specified age. This can avoid additional court and attorney costs of going through a court ordered guardianship process which would be necessary unless you have a special minor’s trust. This tool can be a part of your new will or new trust.
Guardian for Children: We discussed the assets and property management for your children, but who is going to be responsible for actually caring for them? Have you thought of where they will leave and who will be charged with assisting with their medical decisions? Is that person or person willing to serve in such a role? All of these are important questions and once the answers are resolved, consider executing an appointment of guardian for your minor children in the event of your death.
Avoiding Court Involvement: Do you wish for your spouse to have to deal with the responsibility of hiring an attorney and appearing in Court after your death? If not, you may want to consider creating a Living Trust or Family Trust. When created effectively, this tool can allow your spouse to avoid having to deal with the headaches of dealing with the Probate Court system after your passing. A trust is also a great idea if you have started to utilize investment accounts or investment properties, particularly if the properties are in different states. If for example, you used your big end of the year bonus on a vacation house in Florida, the Trust is perfect for you. You could avoid the Probate process in Texas, but also in the state where your other properties are located.
These are just some of the many considerations that you should be discussing with your spouse as you transition in to the next phase of your adult life. You have done a great job of accumulating wealth and raising those kids so far, now it is time to take the next step and updating that old estate plan for maximum protection for your family and your assets.