• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Phone: (832) 408-0505

GP Schoemakers, PLLC - Trusts, Estates, Probate, Family Law Firm - Protecting You, Your Family, and Your Future

Gratia Schoemakers

  • Subscribe To
    Our Newsletter
  • Phone
    (832) 408-0505
  • Schedule An Appointment
  • About
    • Gratia Schoemakers
    • Community Outreach Program
  • Estate Planning
    • Estate Planning
    • Wills
    • Trusts
    • Durable Power of Attorney
    • Living Will
    • Special Needs Planning
    • Kids Safety Plan
  • Probate
    • Probate A Will
    • Heirship Determination
    • Muniment of Title
    • Trust Administration
  • Special Needs
  • Family Law
    • Divorce
    • Collaborative Divorce
    • Mediation
    • Custody/Visitation
    • Adoptions
    • Name Change
  • Blog
    • Estate Planning
    • Probate
    • Guardianship
    • Family Law
    • Other
  • Contact

Guardians

How to Leave Your Life Insurance and Retirement Plan to Your Minor Children

August 23, 2018 By Gratia P. Schoemakers, Esq.

Your children are your pride and joy.  It is no surprise that at some point or another, every parent likely becomes concerned about who will care for a minor child or children if one or both parents die or are incapacitated.  From a financial perspective, many parents turn to life insurance in an effort to take care of their family in the event of death.  While it is true that life insurance is a particularly helpful financial tool to protect your loved ones, it is just as important to consider how to leave the proceeds to your minor children.  Beyond this, you should also take into account how to incorporate your retirement money (IRAs and 401(k)s), another common, significant asset into your overall estate plan.

mother and child

Once you decide to purchase life insurance you will name a beneficiary of the death benefits.  You also name a beneficiary on your retirement accounts.  But, if you fail to have a system in place and your children are minors at the time they inherit these assets, the court will appoint a property guardian or a conservator (the title depends on state law, but the role of this person is to “watch over” a minor person’s money).  This process will require attorneys’ fees, court proceedings, supervision from the court, and will generally limit investment options — all costs and delays that will not help your children, but rather cost them a significant percentage of their inheritance.  Another downside?  Whatever’s left when the child becomes an adult (usually at age 18, but may be older, 19 or 21, in some states) will be handed over, without any guidance or boundaries.  This can impact college financial aid opportunities as well as open up a ready opportunity for irresponsible spending that most parents would never intend.

How To Leave Assets?

There are several ways in which you can structure your life insurance policies, retirement accounts, and overall estate plan to benefit your minor children in the most streamlined way possible.

First, instead of naming minor children as beneficiaries, use a children’s trust to manage and use the money for the benefit of your children.  This lets you designate someone you think will manage the money well, rather than leaving it to the whims of the court.

Second, select and name a guardian to handle the day-to-day care for your children.  This person can be different than the person managing in the money, which can sometimes work well depending on the amounts involved and the different skill sets needed to manage money versus raise children.

Third, if you have a living trust, make sure you have properly funded the trust and aligned your retirement assets with the plan.  If you do not yet have a trust, consider the benefits of one over will-based planning.  Both types of plans will allow you to designate how much and when your children will receive the money, but a trust-based plan will allow you to do so without court involvement.

Benefits of a Trust

Generally, parents list a minor child as the secondary or contingent beneficiary on life insurance and retirement accounts after first naming the surviving spouse as a primary beneficiary.  This may work, as long as everyone dies in the “right” order and at the “right” time.  But, it’s a gamble, and providing structure through a trust for these inheritances is a vastly better option.  Unlike guardianship or custodian accounts, where the proceeds must be handed over once the minor(s) turns a certain age, you can specify at which age your child receives the proceeds.  This allows you to specifically designate how the money is to be used, so it will be available for the important life events, while protecting your children from reckless spending.  Ultimately you have more control with a trust, and your customized plan will provide the best protection for your family.

If you have any questions about how to leave assets to your minor children — whether it is a life insurance policy, a retirement account, or any other asset — contact us today.  A legal professional can explain the options available to your family, determine what tax implications will result, and advise you on the best structure that will protect your family’s needs.  Call or contact our office today to schedule a time for us to sit down and talk.

Filed Under: Estate Planning, Retirement Tagged With: Assets, Beneficiaries, Children, Guardians, Insurance, Life Insurance, Minor Children, Tips, Trust

One Call You Must Make After You Buy a Home (That You’ve Probably Forgotten)

August 23, 2018 By Gratia P. Schoemakers, Esq.

During the home buying process, you worked with a lot of individuals: your realtor, the seller’s realtor, the title company, the loan officer, and the home inspector.  Now that you have finalized the purchase of your house, there is one more expert you need to call: your estate planning attorney.

real estate agents

Aligning Your Ownership with Existing Estate Planning

First, your attorney can help you review the new documents associated with your home purchase in conjunction with your existing estate plan to ensure that everything aligns and works towards your overall estate planning objectives.  If your existing estate plans include a trust that owns all of your assets, it is crucial that your new home is titled in the name of the trust and not in your name individually (or jointly if married).

General Review/Update of Your Estate Plan

Since you have engaged in a new life-changing event, now is the perfect time to review your existing plan.  This is a great opportunity to make sure that the individuals you have appointed in the crucial roles of guardian, executor, agent, or trustee are still able to carry out those duties when the need arises.  With the passage of time, these individuals may have moved away, died, or otherwise undergone a life change themselves that makes them a less than a desirable candidate to act on your behalf.

While you are reviewing your estate plans, it is also important that you review the dispositive language.  Do you still want to have your assets divided the same way?  Have the needs of your beneficiaries changed over the years?  To ensure that you are protecting and providing for your beneficiaries, you need to make sure that the provisions are set up for the best-individualized protection.

Lastly, if the purchase of your new home is in a different state, you will definitely want to visit an estate planning attorney.  By changing states, the documents you previously have prepared may not adequately protect you and your family.  Each state has unique laws regarding trusts and estates, you will need to make sure that any documents you are currently relying on are enforceable in your new state.  Unenforceable or not-optimized documents can be just as bad as having no estate planning documents at all.

Give us a call.

Buying a new home is a great new adventure.  Give us a call so we can make sure that you are embarking on this new chapter in your life fully protected.

Contact us today.  We’re here to help.

Filed Under: Estate Planning, Home/Property Ownership Tagged With: Executor, Guardians, Trust, Trustee

The Biggest Threats to Successful Estate Planning

August 23, 2018 By Gratia P. Schoemakers, Esq.

Poor estate planning is a recipe for disaster.  Look no further than Dickens’ Bleak House — or a telenovela — to witness the tragedy and melodrama inadequate estate planning can cause.  While having your estate planning documents prepared is the first hurdle to overcoming these types of disasters, there are several threats that lurk around the corner that might derail your wishes.

Family Conflict

family

According to a TF Wealth survey of over 100 estate planning professionals, family conflict is the number one risk to a peaceful inheritance.  If children are treated differently under the estate plan, there is often an assumption that a mistake was made in drafting the documents or that someone has exerted undue influence on the parent.  While this may not be the case, without any guidance from you, family members can begin to think the worst of each other.

Sloppy or No Estate Planning

If you have not done any estate planning or if what you have done is ineffective, your estate will be subject to your state’s intestate laws.  These laws predetermine who will inherit your assets and in what proportion.  While these statutory schemes might work for some people, they will have adverse consequences for those who have been married multiple times, have children from prior relationships, or children who need additional asset protection.  If you haven’t done any estate planning, you’re simply leaving your inheritance and your legacy in the hands of the government.

In order to ensure that your wishes are being carried out and safe from the ever present dangers, it is important that you know what a successful estate plan looks like.

No (or Little) Family Conflict

The goal here is for there to be no surprises.  If you are choosing to treat children or other family members differently, be open and honest about it.  It may be helpful to have a conversation about your wishes prior to your death so that those individuals understand why you have made those decisions.  Even if you choose to not have such a conversation, it’s important to discuss your plan and reasons with your attorney, so that the plan can be drafted to carry out your wishes.

Eliminate (or Minimize) Costs and Taxes

Watching inheritance get whittled away by taxes and fees will only lead to frustration and hard feelings.  When preparing your estate plan, your intent is to benefit your loved ones, not the government.  Working with a qualified estate planning attorney can help ensure that your assets are being handled in such a way that the administrative costs of your passing and any income or estate tax are minimized or avoided.

A Chosen Representative

It is possible that, later in life, you may not be able to handle all of your affairs yourself and may require some assistance from a loved one, whether it be with your finances or healthcare.  Look for someone you trust who understands you and your desires.  Don’t necessarily rely on someone just because they are the most convenient.  And, don’t rely on hope that everyone will know who you want to be in charge.  You must ensure that you’ve granted proper authority using a power of attorney, a trust, and a will.

Ensure that Everyone Gets What You Want

Your assets may be, or may in some way, represent your legacy.  Do some real soul-searching about how and what you want to share this with your family and friends.  To ensure that your legacy is passed on in a meaningful way, consider including an explanation as to why someone is receiving a particular inheritance.  If you have wishes as to how they use a gift of money, he or she may appreciate hearing the hopes and dreams you have for them and their future even though you are no longer with them.

Documents Are Up-to-Date

Life can change quickly.  It is important that you review your estate planning documents with each life change (i.e. birth or death of a family member, purchase or sale of a major asset, change in health, etc.).  It is also important that we stay in touch.  Contact us when these major life changes occur and we will contact you when there are changes in the law.  This will help ensure that your documents stay effective and your wishes are carried out.

So do the groundwork that a little planning requires.  And leave the melodrama for entertainment.  Call or contact us today.  We’re here to help.

Filed Under: Estate Planning, Probate Tagged With: Dying Intestate, Executor, Guardians, Inheritance, Mistakes, Taxes, Tips

  • « Go to Previous Page
  • Go to page 1
  • Go to page 2

Primary Sidebar

Categories

  • Business Planning
  • College Planning
  • Design
  • Divorce
  • Estate Planning
  • Guardianship
  • Home/Property Ownership
  • Natural Disasters
  • POA
  • Post Honeymoon
  • Prenuptials
  • Probate
  • Retirement
  • Tax Time
  • Trusts
  • Videos
  • Wills

Footer

1100 E NASA Pkwy Ste. 420J
Houston, TX 77058

Now Serving: Harris County and Galveston County, Houston, Galveston, Clear Lake, Friendswood, Dickinson, LaMarque, League City, Kemah, Pearland

Copyright © 2023 - All Rights Reserved | Web Design by The Crouch Group | Log in