Sunday, June 2, 2013
Guardians for your Children
Back again with more thoughts on Estate Planning after completing your divorce. This time, we’re thinking about your children and how to provide for them after your passing.
We have already raised the issue of your passing and that under most cases, if you or your ex were to pass, the other natural parent should step in for complete control of the children. As we discussed, your Estate Plan could express your wishes for future guardians, after you and your ex’s untimely death. We can see this in several forms. Most common is a Guardian of the Person and of the Estate. This is where a single person, or even several persons, take full control of your children and your money for the benefit of your children. This is most commonly the case with your brother or sister, the aunt and uncle, taking on the children and their needs, lock, stock and barrel.
However, there can be two other common types of guardians, Guardians of the Person, being the person making life decisions for your children, and/or, Guardians of the Estate, being the person making money decisions for your children. Very common is where you have a sibling, who the children are attached to, who is in the family way, and better capable of caring for children day to day. You are also lucky enough to have another sibling that is the investment whiz, the Walls Street guru, who can better manage the money. This way, we divide and conquer, having your family care for your children in your passing. This thought process is part of the Estate Planning method, to raise these types of questions and discuss these options.
Assuming you have already designated Guardians of the Person, following my prior blog, the next step is to address their financial needs, most commonly through a Revocable Living Trust or other specialized trust mechanisms. With such a Trust in place, your successor trustees, who may also be the Guardians of the Estate, can follow your intent, can provide for specific needs of your children out of the funds of the Trust, such as private school tuition, extra-curricular activities, a car, a computer, college application fees, college tuition and more. As a parent, you can still care for your children and protect their inheritance by having a proper Trust in place to carry out your express wishes. You may even want the money paid directly to the provider rather than the Guardian, especially if your ex is in charge. This is perhaps your final opportunity to exercise your care and some of your control.
There are various other special trust and guardianships to consider, but your Estate Planner should be able to raise and discuss those issues in your consultation and address your needs.
In the days that follow, I will give you more reasons to create, review and revise your Estate Plan. However, if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, and you live in Santa Clara County or thereabout, please contact me at email@example.com, or through my other websites at www.fcbegun.com, or at www.linkedin.com for Fred Begun