Protecting your child while you’re still alive is difficult, but when you’re gone, it’s impossible unless you take the appropriate legal steps before your demise. An estate plan is one of the most responsible, and essential legal acts that a parent can undertake.
If you were to die tomorrow or became incapacitated, what would your child do?
Brad Micklin recommends following these steps to protect your child’s interests:
1. Make a Will or Update Your Current Will
Your assets should be listed in your will along with their beneficiary. If your child is younger, name a guardian that will look after and care for your child in your absence.
2. Discuss Making a Trust
Probate court is a very time-consuming and expensive process. If you have a lot of assets or property, discuss making a trust with your attorney.
3. Make Healthcare Directives
Becoming incapacitated and not being able to make your own medical decisions will become a legal liability for your children. A “living will” and granting power of attorney for your healthcare to someone of your choosing is recommended.
Take the utmost caution with who you choose to grant power of attorney to.
Financial power of attorney should also be discussed with your lawyer. This will be a person that takes control of your finances if you’re incapacitated.
4. Protect Your Child’s Property
Children and young adults are often not responsible enough to manage large assets or money. The last thing you want to do is leave your child an inheritance that is dwindled away frivolously. You can name an adult to manage your child’s inheritance, or setup a trust.
5. Setup Beneficiary Forms
Beneficiaries should be named for:
- Bank accounts
- Retirement plans
- Brokerage accounts
You will need to file beneficiary forms where some accounts are paid to the beneficiary upon your death.
6. Life Insurance, Taxes and Funeral Costs
Life insurance will ease the burden left to your estate. Debts can be paid with life insurance, and 99.7% of estates won’t have to pay taxes unless they’re worth over $5.43 million. Funeral expenses can be paid directly from life insurance premiums and will make this difficult time for your family a little easier to handle.
If you’re a business owner, you’ll also want to set up a succession plan. This is a plan that will allow your business to operate properly after you’re gone. If you have partners, a buyout agreement can be made wherein the other partners will buyout your share of the company when you die.
The Micklin Law Group, LLC is a New Jersey law firm specializing in family law and estates. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. To set up a consultation, call 973-562-0100.