If you are a new parent or expecting your first child, estate planning is probably the furthest thing from your mind. You may have heard that becoming a parent is when estate planning becomes essential, but it can be difficult to imagine fitting in a meeting with a lawyer on top of everything else.

As a parent (or grandparent!), there are a thousand things to worry about. Having children in your life creates more responsibility, and one of those responsibilities is ensuring that you have provided for their care if you are ever unable to provide it yourself.

Do I Need a Will?

When you hear the words, “estate planning,” what do you think about? For most people, a will is the first thing that comes to mind, especially movie scenes of a will being read aloud to greedy heirs. In reality, wills can provide a lot more than a simple distribution of your worldly possessions, and there are many other ways to make sure your wishes are carried out.

In fact, while all adults should have a written will, it should act more as a catch-all for assets that are forgotten or excluded from other estate planning mechanisms. When you allocate assets in a will, they become subject to the state’s probate process. This means that your family will have to go before a probate court and follow a process that ensures that your will is fair and authentic. This process is time-consuming, costly, and public.

Instead, many assets, such as bank accounts, insurance policies, and investments can be transferred to heirs simply by naming a beneficiary. The bulk of an estate can be transferred using a trust (described in detail below), which smooths the transfer process to your heirs and avoids the cost, time, and public nature of probate. However, despite the will’s limitations, it is still important to have a written document that catches any assets that fall through the cracks: either because they were not properly transferred outside of probate or because beneficiaries have not been named or recently updated.

Guardianship

Now that you have minor children, appointing a guardian is the most important function of a will, and it is the main reason why you should still draft a will even if your assets are being transferred through a trust. If you become unable to care for your children while they are under the age of 18, either because of premature death or incapacity due to illness or injury, you must choose a trusted adult who will be able to step in and care for your children. If you do not have a will or do not appoint a guardian in the document, the court will appoint a guardian for you. The court may choose someone that you would not prefer, and a court appointment may result in disputes or even legal battles among family members.

Choosing a guardian is a deeply personal decision and one that should be made after careful consideration. Appointing a guardian for your minor children can be different than choosing a conservator or trustee, who will manage a minor’s inheritance of property and assets until he or she reaches adulthood. This will be discussed in the next section.

There are a number of factors you will want to consider when choosing a guardian for your minor children:

Who would the child choose? If your child is old enough to give input, you may wish to include him or her in the decision.

Is the person willing and able to be a guardian of minor children? It will be essential to determine whether a potential guardian has the financial means to take care of your minor children. You will also need to discuss whether the potential guardian would be willing to care for your children.

Does the person share your religious and moral values? If specific religious beliefs and/or values are important to you, make sure that the potential guardian shares those beliefs and values.

Is the person married or unmarried? Do they have children of their own? Where do they live? Can their home accommodate children? It is important to think through all of these questions. There often is no easy answer to who would be the best guardian for your children, but it is important to consider all of the implications of this decision.

The guardianship provision in your will should appoint a guardian and a successor guardian. It is essential to appoint at least two individuals in case the first guardian is unable or unwilling to take on custody of your children when called upon. It may not be advisable to appoint a married couple jointly as guardians because of the possibility of divorce.

When you are ready to determine guardians for your minor children, ask an experienced Michigan attorney about selecting both a permanent and an emergency guardian for your children. An emergency guardian is an individual who lives nearby and would be able to take immediate responsibility for the children. You can also talk through your options with an attorney, and he or she can inform you of any statutory limitations before you make a decision about who you would like to appoint as a potential guardian. Your attorney can also help you draft a document providing specific instructions for raising your children.

Providing for your Children: Revocable Living Trust

Minor children cannot inherit money or property outright until they reach adulthood. If you die while your children are still minors, it will be important to create a method that allows your children and their guardian to receive financial support from your estate. Creating a revocable living trust is a great way to ensure that your children will be provided for, even if they are still minors.

A revocable living trust is a way to allocate assets for a beneficiary while you are still alive. Because the trust is revocable, it can also be undone or adapted at any time while you are alive. When you create a revocable living trust, you will appoint yourself trustee so that you remain in control of your assets. When you become incapacitated or pass away, your trust will become irrevocable and control of the assets will pass to the successor trustee. You can appoint any trusted individual to be the successor trustee. The first choice is often a spouse, but if your spouse is unable to serve it can be the same person as your appointed guardian or another person. This successor trustee will be responsible for ensuring that the guidelines of the trust are carried out. The terms of your trust could require the successor trustee to make distributions to the guardian to provide for the health, daily needs, education, and child care of minor children, or the trust could instruct the successor trustee to distribute the assets to your children as soon as they reach maturity or at later, specified ages. You might have provided your children with lifetime asset protection over their inheritance. The beauty of trusts is its flexibility.Your guidelines can be tailored specifically to your family and your wishes.

The successor trustee should be someone trustworthy and reliable. Take into consideration the fact that the trustee and the guardian will need to work closely together to ensure that your child is cared for and that the guardian has access to funds needed to provide for the child’s care.

If you have adult children and guardianship is not an issue, a revocable living trust is still a great option. Again, it allows you to retain control of your assets until you are no longer able to do so. Then the funds can be made available to your adult children in accordance with your instructions. Because assets distributed through a trust are not subject to probate, you will be able to pass assets to your beneficiaries without the delay, public exposure, or cost of going to probate court.

Power of Attorney and Advance Healthcare Directive

If you worked with an attorney before becoming a parent or grandparent, you may want to revisit these documents with children in mind. You and your attorney can discuss how these decisions can impact your children.

A Power of Attorney is a document that specifies who will be authorized to manage your assets should you become incapacitated. Keep your children in mind and choose someone you trust and who you know will act in your children’s best interests.

An Advance Healthcare Directive (commonly called a Patient Advocate Designation in Michigan) is a planning document that names the person who will be legally empowered to make medical decisions on your behalf should you become incapacitated. It can also lay out your preferences for end-of-life care. It will allow you to specify how you would like matters such as resuscitation and pain medication to be handled in the case that you are unable to state your preferences.

Ask Questions and Get Answers From a Michigan Estate Planning Attorney

Parenting can sometimes be stressful. One way to ease your worries is to ensure that your children will be cared for in the event that you are not able to provide for them. Estate planning is a great way to protect and plan for your children’s future, and an experienced and compassionate attorney can go a long way to help you ease your mind.

Call Legacy Counsel at (269) 932-4017 or contact us online today to schedule your initial consultation with an estate planning lawyer.

This article is a service of Legacy Counsel PLC, an estate planning law firm in Saint Joseph, Michigan.

View All Blogs