Daddy, Papa, Ahv, Oto-san, Tata, Ba. However you say it, they all mean the same thing. Dad – the guy the whole family relies on to be grounded, strong, and financially secure. Insect-killer is also an added plus.
When you are a father with young children, you need to take special care of your estate planning. An intelligently crafted estate plan will provide you and your children with peace of mind, no matter what the future may bring. Creating your end-of-life documents now, while you are young and healthy, puts you in the driver’s seat…now and later. As you begin thinking about your estate planning, here are 5 critical points to consider:
- 1. Who will be in charge of my young child or children?
- This is the most important question of all. It is crucial that you create a Last Will and Testament where you name a guardian to care for your minor children. You can also name a backup guardian, in case your first choice is unable to carry out the responsibility.
- When naming a guardian, consider:
- Is the person physically able to take care of your children?
- Where does the person live?
- Will your children feel comfortable living in their home?
- Will the person be willing to accept the child’s pets if they are attached to them?
- When having children with special needs, a Special Needs Trust can help you provide for that child throughout his or her life. It will avoid compromising your child’s Medicaid, Social Security and other forms of public assistance. Be sure to consult a professional who has expertise with the complexities of a Special Needs Trust.
- When having children from previous marriages, special consideration is needed. If you wish for the children to inherit specific assets or part of the assets, but you do not trust your former spouse to direct your children’s inheritance, you need a Living Trust. In the Trust document, you can name a Trustee (other than your former spouse) who will handle the finances until your children become adults.
- 2. Who will manage and distribute my assets?
Who do you trust to take care of the day to day financial and legal activities for your children? You can nominate this person as the Personal Representative in your Last Will and Testament or as the Successor Trustee in your Living Trust. Remember that if you do not put this in writing, the Florida Court system will make this decision for you.
- 3. Educate Yourself on Guardianship Law
If a minor child, (under 18 years of age in Florida), experiences the loss of a parent, and is entitled to receive an inheritance, FL law governs how this inheritance will be managed until the child turns 18. This is through a court process called “guardianship.” Inheritance includes real estate, proceeds in a bank account, life insurance proceeds, stocks, CDs, cash in a safety deposit box/vault, or any other investments. When a child is set to inherit anything in excess of $15,000, a court must appoint a legal guardian to manage the minor child’s inheritance and to safeguard the minor’s interests. The process takes time, involves court expenses, and requires an attorney. All these fees usually come out of the inheritance. Note that although a parent is considered a “natural” guardian, only a court can appoint them as a “legal” guardian. A way around the guardianship process involves creating a Trust through an estate planning attorney.
- 4. Who will make medical and financial decisions if I am incapacitated?
Many people think about estate planning in the context of someone dying, but it is equally important if you are sick, injured, or incapacitated and cannot make decisions for yourself. Having a Durable Power of Attorney for finances and a Health Care Surrogate for medical decisions will ensure someone can manage your care and finances if you are not able to do it.
- Durable Power of Attorney – A crucial legal document that functions while you are alive and allows you to select a person (the “agent”) to “step into your shoes” if you become mentally or physically incapacitated. The agent will be able to make legal and financial decisions and conduct transactions on your behalf. The Power of Attorney document ends when a person passes away. At which point, your Trust or Will should kick in to dictate the terms of how to distribute your estate. Note that if you created this document prior to October of 2011, it is time to update it as the laws have changed.
- Health Care Surrogate & Living Will –Also known as a Health Care Proxy, allows you to name someone (the “agent”) that will make health care decisions for you in case you are unable to make them yourself. Such decisions include consenting to certain medical procedures, seeking a second opinion, obtaining medical records, or transferring you to a different medical facility. If you don’t prepare a Health Care Surrogate document, and you fall ill and cannot make your own medical decisions, then Florida law determines who is responsible for your healthcare decisions. Note that if you are still legally married, this means your spouse!
- 5. Meet with an Estate Planning Attorney
The best way to educate yourself on all the “what ifs” is to meet with an experienced estate planning attorney. Things to keep in mind:
- If you own a home – creating a “Living Trust” also known as a “Revocable Trust” is the best way to ensure the home will pass to your loved ones without the lengthy court-supervised probate process. Trusts are private documents used to by-pass probate, in which you get to name who inherits your home (or other real estate) and who will manage that property until your children become adults.
- If you have any investment accounts – make sure your minor children are not named as beneficiaries on these accounts, otherwise Florida Guardianship rules will apply.
Being a parent is the most important job you will ever have. We understand the love you have for your children and will help protect your family as well as your peace of mind. Contact OC Estate & Elder Law at (954) 251-0332 or email@example.com to receive a personalized consultation regarding all of your estate planning options as a father of young children.