Are you dreaming of a smart holiday this year? Well, we have gifts to protect your kids’ future. Superheroes and wizards, video games and drones? All great choices. But as you check off your list with playthings they want, how about something they really need? Everything is sustainably presented (no wrapping paper) and requires no batteries, downloads, or uploads. We are not including receipts because these gifts are free, but you will never want to exchange them anyway.
This year, we offer a few ornaments from our tree of legal knowledge: precious estate planning documents that will preserve your wealth, safeguard your minor children, and allow you to provide for your loved ones once you are gone. With these gifts, your heirs will not be haunted by the Ghost of Bad Estate Decisions Past.
Even if you have never gone through a messy probate after the death of a loved one, you should know that having an estate plan protects your family in many ways. Here are 5 Golden Strategies for safeguarding your children’s future:
Golden Strategy #1: Avoid Fights by Appointing a Guardian for Your Minor Children.
If you have minor children (those under 18 years of age in Florida), it is imperative that you and your spouse name a guardian to take care of your children physically and financially if something happens to you. This designation can be done within your Last Will and Testament (“Will”) or in a separate document called a “Declaration Naming Pre-Need Guardian for Minor.” Settling this now, in writing, will minimize lawsuits that could arise over custody if you pass away.
Golden Strategy #2: Avoid Power Struggles by Appointing a Back-Up You.
What will happen to your assets after you die? Lessen the chance that your children may squander everything, by appointing a Personal Representative in your Will. Both Wills and Trusts are used to designate who should receive your assets upon your death. The people or charities you designate are called beneficiaries. Revocable Trusts allow you to appoint someone as your Successor Trustee after you pass away and can no longer serve as Trustee. This person will be responsible for distributing all your assets according to the terms of your Trust. Likewise, Wills allow you to appoint someone to become “Personal Representative” of your estate. This person will be responsible for carrying out your last wishes according to what you wrote in your Will. To learn the differences between Wills and Trusts, it is best to seek a consultation with an estate planning attorney who can explain the nuances based on Florida law.
Golden Strategy #3: Avoid Losing Control of Your Finances.
Suppose you pass away without having any estate planning documents in place. In that case, the State of Florida determines who receives your assets based on the rules of intestate succession. This means a Judge will distribute your assets based on the Florida rules determining your next of kin. You (or your family members) have no say in who receives what and how much they get. The only way to ensure your wishes are properly carried out is to create a Will or a Trust dictating how your assets will be handled after your death.
Golden Strategy #5: Avoid Student Loans for Your Children
A 529 plan is one of the IRS’s rare drawback-free gifts to the taxpayer. The 529 form is a savings plan that gives you tax breaks for saving up for your child’s education. 529 forms are also called “qualified tuition plans.” These qualified tuition plans benefit both you and your child. Your child’s college financing will get a head start, and you will not be saddled with a huge tax bill for being frugal by saving a college fund. This is an excellent present that will pay off in the long run.
Golden Strategy #5: Avoid Awful Decisions for Your Loved Ones.
One of the worst cases we have seen is a client who had to decide whether to continue giving her mother, who was in a coma, life-sustaining treatments even when the doctors said they would only prolong her mother’s death. That is a horrible position to find yourself in. The client never spoke to her mother about this topic, and her mother did not have a Living Will. It was up to the client and her siblings to make that decision. They had different opinions on this matter, and familial fighting ensued. If their mother had created a Living Will and Designation of Health Care Surrogate, (also known as a Health Care Directive or Health Care Proxy), they could have simply implemented what their mother wanted instead of guessing.
While we are not suggesting you get these legal documents instead of the fun toys and games on your children’s wish list – that would be one disappointing chunk of coal – your children will certainly thank you later for adding them now. Like setting up your holiday decorations, creating an estate plan is something that turns out better with help. We suggest working with our experienced estate planning attorneys. We also recommend getting your family’s input as part of the estate planning process. Contact OC Estate & Elder Law at (954) 251-0332 or firstname.lastname@example.org to learn how effective estate planning will be the best gift this season.