Guardianship
There’s Never A Better Time Than Now To Get Your Affairs in Order
The idea of getting your financial and legal house in order is likely the last thing on your mind during the busy holiday season. But, getting started is much easier than you think. In fact, the end of the year is a good time to reflect upon the year that has passed and focus on your aspirations for the future. Don’t hold this task off for later. Some careful thought and a little bit of work now can go a long way to help you feel 100% confident about moving forward in the new tax year.
In preparation for the tax season, you likely have already begun gathering some paperwork, like you property tax bill, year end mortgage statement, or final pay stubs. Although filing your income taxes is different than putting your affairs in order, you’re already in paperwork “mode”, so now is the perfect time to reassess your legal and financial situation to create a new plan or update an existing one that no longer suits your circumstances.
Basic Estate Planning
All you need to do is start with a general list of everything that you own. You don’t have to complete a comprehensive inventory. Think instead about categories of assets, like bank accounts, life insurance, real estate, vehicles, etc.
Then, draw out your family tree and think about who you would like to receive what you’ve spent your lifetime building. If you don’t put your wishes in writing, your estate – everything you’ve worked so hard to build – may be liquidated and will be distributed according to the government’s plan, known as intestacy.
The foundation of all estate plans are wills and trusts. Which one is the best for your depends on your individual circumstances.
A will is a written legal declaration of your intentions on how you want your property disposed upon death. This document is not legally enforceable until after your passing and, therefore, it can be changed at any time before you die or have diminished mental incapacity. A will allows you to control what happens after you are gone.
A trust is a legal arrangement where a trustee manages property for the benefit of the beneficiaries. There are many kinds of trusts, ranging from living trusts to complex dynasty trusts. Each type of trust has its own benefits and drawbacks, so talk with us about which one is the best fit for your circumstances.
Although there are many types of trusts, the one most people need is a living trust. It’s a great alternative to a will, because it can be changed during your life, can provide financial protection should you become incapacitated, and yet often is easier and less expensive for your family to handle upon your death. Another common type of trust is a testamentary trust, which is one that is contained within the provisions of the will. Just like a will, a testamentary trust is not operative until your death, making them a little less flexible and more limited in function.
Benefits of Estate Planning
Estate planning can help provide financial stability for loved ones, designate a guardian for minor children or disabled family members, distribute property to chosen charitable organizations, reduce tax liabilities, and achieve other personal and family goals. Organizing your financial and legal affairs is your opportunity to make impactful decisions on your assets, money, and healthcare and leave a legacy after you are gone.
Planning your estate may feel like a daunting task. We’re here to help. You don’t have to do this alone. Call or contact us today to discuss your options and organize your future.
The Top 2 Ways the Court Gets Involved in Your Estate, and How to Avoid Them
No one wants unnecessary court involvement in their life. But without careful and proactive estate planning, chances are that some aspect of your estate will end up being decided there.
Here are two of the most common ways court proceedings can make their way into the management and distribution of your assets, along with the estate planning measures you can take to avoid them.
1. Guardianship and conservatorship
If you experience an inability to make decisions on your own behalf, also known as legal incapacity, and you don’t have provisions for what to do in this situation clearly outlined in your estate plan, it falls upon the guardianship or conservatorship court to decide who will become responsible for handling your finances, lifestyle, and medical care. You can become legally incapacitated because of an accident, injury, or degenerative illness. In the case of guardianship and conservatorship (sometimes called “living probate”), your estate’s details, as well as discussion about your medical conditions, may be made public and be the topic of court proceedings.
How to avoid it: To make sure the government doesn’t get involved in your wealth management and health care during your lifetime, you need to determine who will be your power of attorney. You can appoint durable and medical powers of attorney for various categories of management in your life and estate. A solid long-term care plan, living will, and fully-funded revocable trust are also crucial components in avoiding living probate proceedings.
2. The probate process
Probate is the name for the court proceeding that takes place after your death to prove that your will is valid and that its terms are carried out accurately and legally. Probate brings your financial and personal affairs out into the open via public forum, and your estate can dwindle due to legal fees incurred during this time. It can also take an excessive amount of time due to the slow nature of court proceedings, dragging out a potentially stressful episode for your family.
How to avoid it: Having a will does not avoid probate, since all wills must go through probate to be validated. Although you’ll often hear about joint tenancy, beneficiary designations, and other probate avoidance options as alternatives to wills, only a fully funded revocable trust can consolidate the management and preservation of all types of assets. So, the best way to avoid probate is to work with your estate planning attorney to establish and fully fund a revocable living trust and name your beneficiaries and trustees ahead of time.
We’re here to help
Estate planning can be a daunting thing to consider when you’re busy. And we know you are. That’s why we work diligently to present you with the best estate planning tools and strategies in a straightforward manner, letting you get back to focusing on what’s most important to you today. Call or contact us today to discuss what strategies will work best to keep your assets in your family and the court out of your affairs.
How to Choose a Guardian for Yourself
Every day we make hundreds of decisions from what to eat for breakfast to where we go on vacation. With each passing day, there are more choices to be made. But, what will happen if you can’t make decisions for yourself? Before that time comes, there is one important decision you need to make. Who do you want to serve as your guardian?
For those of you who have had your estate planning recently done or reviewed, you probably discussed and executed a Financial Power of Attorney. For those of you on the fence about having your estate planning completed, this is another valuable reason why it is so crucial. With this document, you are authorizing someone to handle your financial affairs (sign checks in your name, open up a bank account, enter into contracts on your behalf, etc.). This can be very beneficial because if you are no longer able to do these things for yourself, someone else can immediately step in and do them for you. However, you may run into situations in which third parties are going to want the person to have more authority than just a signed Financial Power of Attorney. In these cases, they are going to require you have a Guardian appointed.
A Guardian is essentially a court-appointed and court-“controlled” agent. They have the court’s authority to handle your financial affairs on your behalf if you cannot. In many jurisdictions, the court will give priority to an individual who has been named as agent under a Financial Power of Attorney, making it incredibly important that you have one prepared. If you do not have one, each state will have a law that lists the order in which people are appointed. In some cases, you could end up having someone handling your affairs that you would have never wanted, like an estranged parent or sibling. A financial power of attorney lets you share your wishes with the court.
To ensure that you are taken care of when you can no longer take care of yourself, it is important that you choose the right person. When analyzing the pool of candidates, consider the following questions:
- Does he or she have the time to act as your guardian? Often times, those individuals who are the most organized and knowledgeable to help out are also the most heavily scheduled individuals and may not be able to step in.
- Does he or she live close by? Even in our digital world, some issues may take multiple steps or in-person interactions to resolve. If the individual you are looking to appoint lives far away, he or she may not be able to fully carry out their duties.
- Does he or she have the skill set needed? When acting as a Guardian, it is crucial that the individual is organized, thorough, and can communicate clearly. A person who is scattered or flies off the handle easily is not going to be a good advocate for you.
While we all want to retain as much autonomy as possible, there may come a time when we need someone to act for us. Selecting the right individual will ensure that you are taken care according to your wishes. If you have any questions or would like to discuss who you should appoint for this role, call or contact us. We’re here to help.
Do It Now: Name a Guardian for Your Minor Child(ren)
We know it’s hard. Thinking about someone else raising your children can stop you in your tracks. It feels crushing and too horrific to consider. But you must. If you don’t, a stranger will determine who raises your children if something happens to you – your children’s guardian could be a relative you despise or even a stranger you’ve never met.
No one will ever be you or parent exactly like you, but more than likely, there is someone you know that could do a decent job providing for your children’s general welfare, education, and medical needs if you are no longer available to do so. Parents with minor children need to name someone to raise them (a guardian) in the event both parents should die before the child becomes an adult. While the likelihood of that actually happening is slim, the consequences of not naming a guardian are more than intense.
If no guardian is named in your will, a judge – a stranger who does not know you, your child, or your relatives and friends – will decide who will raise your child. Anyone can ask to be considered, and the judge will select the person he or she deems most appropriate. Families tend to fight over children, especially if there’s money involved – and worse – no one may be willing to take your child; if that happens, the judge will place your child in foster care. On the other hand, if you name a guardian, the judge will likely support your choice.
How to Choose a Guardian
Your children’s guardian can be a relative or friend. Here are the factors our clients have considered when selecting guardians (and backup guardians).
- How well the children and potential guardian know and enjoy each other
- Parenting style, moral values, educational level, health practices, religious/spiritual beliefs
- Location – if the guardian lives far away, your children would have to move from a familiar school, friends, and neighborhood
- The age and health of the guardian-candidates:
- Grandparents may have the time, but they may or may not have the energy to keep up with a toddler or teenager.
- An older guardian may become ill and/or even die before a child is grown, so there would be a double loss.
- A younger guardian, especially a sibling, may be concentrating on finishing college or starting a career.
- Emotional preparedness:
- Someone who is single or who doesn’t want children may resent having to care for your children.
- Someone with a houseful of their own children may or may not want more around.
WARNING: Serving as guardian and raising your children is a big deal; don’t spring such a responsibility on anyone. Ask your top candidates if they would be willing to serve, and name at least one alternate in case the first choice becomes unable to serve.
Who’s in Charge of the Money
Raising your children should not be a financial burden for the guardian, and a candidate’s lack of finances should not be the deciding factor. You will need to provide enough money (from assets and/or life insurance) to provide for your children. Some parents also earmark funds to help the guardian buy a larger car or add to their existing home, so there’s plenty of room for extra children.
Factors to consider:
- Naming a separate person to handle the money can be a good idea. That person would be the trustee in charge of the assets, but not guardian of the children, responsible for the day-to-day raising of the children.
- However, having the same person raise the children and handle the money can make things simpler because the guardian would not have to ask someone else for money.
- But the best person to raise the children may not be the best person to handle the money and it may be tempting for them to use this money for their own purposes.
Let’s Continue this Conversation
We know it’s not easy, but don’t let that stop you. We’re happy to talk this through with you and legally document your wishes. Know that you can change your mind and select a different guardian anytime you’d like. The chances of needing the guardian to actually step in are usually slim (we always hope this is the one nomination that’s never actually needed); but, you’re a parent and your job is to provide for and protect your children, so let’s do this. Contact us or call or office now for an appointment and we’ll get your children protected.
Should Your Child’s Guardian and Trustee be the Same Person?
If you have overheard any discussion about estate planning, you have likely heard the words “guardian” or “trustee” tossed around in the conversation. When it comes to estate planning, who will be ultimately in charge of your minor child is an important decision that requires consideration of many factors. Although there is no substitute for you as a parent, a guardian is essentially someone who steps in as a parent, assuming the parental role and raising the child through adulthood. A trustee, on the other hand, is in charge of managing the financial legacy that has been left behind for the minor. As a parent, you need to take into account the characteristics needed for each role.
Who Makes a Good Guardian?
When choosing a guardian, the top factor to consider is who is the best person that will love and raise your child in a manner that you would. This would include religious beliefs, parenting style, interest in extracurricular activities, energy level, and whether or not he or she has children already. Keep in mind that a guardian will provide day-to-day love, care, and support for your child. While the guardian you choose may be great with your children, he or she may not be great with money. For this reason, it may make sense to place the financial management of your minor child’s funds in the hands of someone else.
Who Makes a Good Trustee?
Not surprisingly, when choosing a trustee the most important characteristic is that he or she is great with finances. Specifically, the trustee must be able to manage the funds in accordance with your intent and instructions that are left in your trust. Consider whether he or she will honor your wishes. Likewise, should you choose to grant your successor trustee discretion in making financial decisions regarding the management of funds left behind you should ensure the individual’s decisions will be aligned with your intent. In short, you want to choose a successor trustee who will act in your minor child’s best interest within the limits you have set forth in your estate plan documents. If you choose two different people for the role of guardian and trustee, make sure to consider how the two get along as they will likely have to work together throughout your minor’s childhood and possibly into adulthood.
Seek Help to Make Your Decision
While estate planning can be daunting, it does not have to be. Contact a knowledgeable estate planning attorney to help guide you through this process. We can explain your options and advise you on the best plan that will follow your wishes while at the same time meeting your family’s needs.
Five Considerations When Selecting a Guardian for Your Children
There is no question that having children changes everything — and estate planning is no exception. If you and your spouse pass away or become legally incapacitated, and arrangements were never made in the event of such an emergency, your minor child or children will have to be placed with a new family. Not surprisingly, such a drastic change can be a disruptive process for minor children — even if they are placed with members of your family. If you choose a guardian for your child in your will or other estate plan documents this difficult time can go much more smoothly.
Who Makes a Good Guardian?
A guardian for your minor child “steps into” your shoes in the event you can no longer care for him or her. No one wants this to happen, but when a parent becomes incapacitated or dies, the minor child left behind will need care. Because a guardian plays such an important role in your family’s life, there are several factors to consider when choosing someone to take on this role:
- Shared values. It is best to choose someone who has a common level of religious belief. For example, if you are not the religious type you may have objections to someone who would expect your child to join and regularly attend church.
- Parenting style. Whether you run a tight ship at home or prefer a laissez-faire approach to raising children, choosing someone who will continue in your style is likely the best fit.
- Involvement. Someone who travels all the time will not be able to regularly show up to your kids’ soccer games, gymnastics meets, band concerts, and live theater performances — an important part of being a guardian to your children.
- Energy level. Having the stamina to be able to keep up with your child — especially during the younger years — is an important factor.
- Other children. While a potential guardian who already has children should not be a deal breaker, you should consider how adding more children into the family will affect the dynamic, particularly when it comes to the ages of the kids.
Other Factors to Consider
In the same manner that you can choose different individuals to manage the estate’s finances and your minor children’s day-to-day needs, you can also choose more than one guardian for your kids. You may want to assign one guardian per child, depending on your family’s circumstances. That being said, setting up guardianship this way may result in your children being separated from one another, which is usually not a good outcome. Choosing someone who has the resources to care for your children — even if you have left money behind for their care — should also be a factor to consider. Finally, choosing someone who is young enough to be able to care for your child through his or her adulthood, as well as someone who is in good enough health to withstand the challenges of raising a child, are important factors that should be taken into account.
Once you have made a decision on who will be your child’s guardian, contact an experienced estate planning attorney. We can draft the documents you need in order to make this legally binding, as well as create an estate plan that suits your family’s needs and will protect your loved ones in the event you are no longer able to do so yourself.