Having a baby is a great time to get started with an estate plan (if you haven’t already)
Early in the morning just days before Christmas, I received a photo/text message from my long-time best friend, whose wife had given birth to a beautiful, healthy baby boy. Everyone looked exhausted in the picture, but the new mom and dad looked so overjoyed and excited to begin their journey into parenthood. Since then, their son has grown happy and healthy, and mom and dad have been doing a fantastic job. Only there’s one more thing they should do: plan for their son’s future, in case something happens to them. An estate plan is a great way to plan for the future; who would take care of your son if you’re gone, who will your assets go to?
Nobody wants to think about the possibility of something happening to them, especially in such a happy (and frantic) time in their lives, but no time is more important for an update to your estate plan than when you’re adding a new member to the family. This is especially important if the unexpected happens and your child is still young when you pass away or if you become incapacitated.
OK, what needs to be done?
You will want to determine who should care for your children if something should happen to you or your spouse, someone who will ensure their financial and educational needs are met. Given the responsibilities a guardian will have, choose carefully and make sure it is someone you trust, whether from among your family or a friend. Consider how close the person is with your children, whether you share the same parenting philosophies, and how comfortable the person will feel taking in your children and looking after their needs. Most importantly, if you are married, make sure your spouse is involved in these discussions to ensure you are both happy with your chosen guardian.
You should also think about when and how certain property of your estate will pass to them when they are finally old enough to handle the responsibility. This may include setting up a trust agreement to provide for distributions to your children according to a schedule, as opposed to making all distributions once your children turn 18, which would be the result if you only have a will. Your children can also be named as beneficiaries of your retirement accounts and life insurance policies, but this is generally not advisable unless they are grown and mature enough to handle the money on their own. Any funds beneficiary designated to a minor require probate court oversight in what Michigan calls a conservatorship. In Ohio, these are referred to as guardianships. Finally, for property such as homes, consider a lady bird deed, which allows you to convey real estate after your death but still avoid probate.
We get it. Estate planning is not as pleasant a subject as how cute your baby looks in the little dinosaur pajamas, but like creating an emergency plan for your home in case of a fire or break-in, or buying life insurance, it is always better to be prepared. If you already have an estate plan, or you have children and are expecting more, it is always a good time to review and update your plan. What may be right for your neighbor may not be right for you. We’ll discuss your family situation, your assets, and your goals before recommending the right plan for you. It is never too soon to start planning with the pros. Contact us for a free consultation to see how we can help you.
Contact us today to start planning: 248.399.3300 or Info@TheProbatePro.com
Guest writer for this article is our attorney Zachary Trosch.