Young families face different estate planning needs and challenges than those who have had a long life behind them. While established families may be concerned about what will happen to their family when they pass on, young, growing families tend to be more focused on what is happening to their family in the present. And you may even find it hard to justify planning for an “estate” you haven’t yet established.
But here’s the thing ... if you have children, or anyone else you care about, you may not have an “estate”, but you do need estate planning if you want to ensure your loved ones wouldn’t be stuck in court and/or conflict, if anything happens to you.
Here are a few important estate-planning issues for young couples to consider as soon as they start a family.
Care and custody of your children
If you die or become incapacitated before your children reach 18, they will need a legal guardian. To ensure your children are only ever in the care of people you want and choose, you need to name both temporary and long-term guardians for your children.
What if the long-term guardians you have named are not local? If something happens to you and your child is home with a babysitter, or at school, you want to also name local friends or family who would immediately be able to be called upon by authorities.
And you need to legally document your guardian choices. Many people mistakenly believe that identifying friends or family as the “godparent” of their child is enough – it’s not. Further, naming just one person or a couple won’t cover it either. Name at least three options, in case back-ups are needed.
It’s also wise to name guardians not just in your will, but also in a standalone document that is easily accessible for authorities. Your children’s babysitters and temporary guardians should have legal documentation on hand to step in and make immediate, short-term decisions for your little ones.
Your children’s inheritance
Remember, when you die, the assets left to your minor children will need to be managed by someone at least until they turn 18. If no one is identified for this task, the court steps in and may appoint “professionals” to take over the role, which could deplete much of your children’s inheritance. And, it’s totally unnecessary. With just a bit of prior planning, you can keep your loved ones out of the court system and give total control to the people you know, love, and trust.
Who makes decisions for you?
Finally, no matter what your age is, or how big or small your assets are, you should put in place the documentation that appoints the people you would want making decisions for you, if you cannot make your own decisions. Many people think of estate planning as planning strictly for death, but you also need to think about what would happen if you lacked capacity to communicate your wishes.
Without a Durable Power of Attorney, who would take care of your financial affairs if you couldn’t manage them yourself? Without Advance Healthcare Directives, who would make tough medical decisions on your behalf? And how would they know what your wishes would be? Once again, the focus here is on keeping the people you love out of court during what would be a hugely stressful time for them.
Estate planning is a key part of growing up, and showing up for the people you love. So, yes, you may be a young family, but once you’ve become a family, you’re not too young to plan well to make things as easy as possible for the people you love.