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The attorney of Skillern Law Firm, PLLC, Penni Skillern, recently had a baby girl in January of 2015. Yes, that is why there was a lack of blog posts and updates on our website. The first thing she did when she was able to go back to work was update her estate plan to reflect her new expanded family. Not only is it important to set up guardianship in your will, but its important to look at structuring your estate plan distribution for your new infant.
We have previously written about how to handle a minor infant in your estate plan before. Please read the blog post here.
For this blog post, we are going to discuss what to get done for your estate plan once you have the new baby. Having a child or children complicates life in many ways, and your estate plan is no exception. If you had an estate plan written when you were childless, it is important to reflect the monumental change in your situation in life in your estate planning. Most likely, you would want to leave part or all of your estate to your new child(ren). You do not have to have anything fancy like a revocable trust, however, it does need to be done. Here are four simple steps to take.
1. Write or Amend a Will or Trust
Even without children, having an estate plan in place is important. Generally, most young people do not think about getting an estate plan done until they have children. That is understandable, as most single young adults do not own a lot of assets to be distributed at their demise. However, once you have a child, it becomes not only important to write a will to discuss distribution, but also to name a guardian for your child(ren). Make sure to read a previous post about how to chose the right guardian for your child.
Once you have a will with a guardian appointed in place, if your children ever needed a guardian, the court would appoint the person you nominated in your will, absent a serious problem with that person. You can even name a separate guardian for different children if you wish. If you have not made plain in your will or estate plan who you wish to be the guardian of your children, and you pass away unexpectedly, the probate court will have no idea what your wishes were. That can cause fighting among the families of the two parents, each wanting the child. This can be stressful for the families, and especially the children left behind. The court would have no way of knowing which family member of friend who you wished to watch over your children if you were to pass.
The other main reason to write or update your will is that if you do not, and then you pass away, a portion of your estate may not go to your spouse, but may go to your children. If you pass away and have a young child, most people prefer that the money go to their spouse, who will use it to support their children.
Getting a will written and signed is easy, quick, and inexpensive. You can easily set up an appointment with an attorney and have one done and signed within a couple of weeks or a month. This important step can help your new family in unexpected ways and can alleviate an amazing amount of stress in the future if something unforeseen were to happen.
2. Buy Life Insurance
While our attorney was pregnant with her new daughter, she and her husband added new life insurance to their financial portfolio. The reason is simple: their lives were about to get more expensive. It’s not surprising to know that life with a child is more expensive than one without one. If you or your spouse were to pass away unexpectedly, are you prepared to take care of your child(ren) without the other person’s income? Life insurance is there as a safety net, to help take care of expenses that your deceased spouse would have helped with if they remained alive.
Obviously, this is more of a financial planning than legal planning. However, it is good to get both done when you are preparing or soon after you have a child. It’s best to have both your financial and legal plans in place, working together, when you have a child.
3. Write Durable Powers of Attorney and a Living Will
Even without children, Powers of Attorney and Living Wills are extremely important documents to have for every adult. If an accident or sudden illness strikes, these documents will make things much easier for your family.The Powers of Attorney (both financial and health), are documents that designate an individual to take care of matters if you are unable to. We have previously written about these documents, and you can read about Powers of Attorneys here.
Living Wills, or Advanced Directives, are also very important to have in your estate plan. If you have been to the hospital recently, you have probably been asked if you have one when you checked in. An Advanced Directive is a document that sets out your wishes for end-of-life choices and care. Oklahoma allows you to set our your end-of-life health care choices for three scenarios. Read about those here.
Even if you are young, childless, and healthy, these documents are important to have done. If you were seriously injured, these documents would let your family know what you wanted, sparing them very difficult decisions, court costs, and disagreements. There have been many famous young people whose families have gone through courts and disagreements because these documents were not in place. (Terri Schiavo was 26 when her illness began and she fell into a permanent vegetative state.)
4. Designate Beneficiaries on Accounts
One last simple (and completely free!) action to take is to name beneficiaries on your accounts, whether retirement, banks, life insurance, etc. All you need to do is fill out the beneficiary form provided by the account holding institution. By naming a beneficiary, you make it possible for the funds in the account to go directly to the person (or persons) you name, without probate. It is important to know the repercussions of naming minors as beneficiaries, however, so make sure you keep that in mind when you are planning for your new child.
If you do all of the above after you have a child, you are ready. Having a new child is a huge change in your life, and your estate plan needs to reflect that change. You are doing a disservice to your child if you do not plan ahead in case you are not there to take care of him/her. Your family would want to know your wishes for your child(ren) if you pass unexpectedly. Make an appointment with your local estate planning attorney today!
The more clients and friends that we talk to, the more we see why so many people put off writing their will. No one especially wants to think about their own future death, and no one really wants to plan for it. In reality, however, everyone needs to have a will prepared, even at a young age. There are a multitude of reasons to consider, and any reputable wills and trusts lawyer should be able to go through the factors with you to make certain that you are protecting your assets as well as the people you love.
First off, it’s obvious people do not want to think about death. However, the reality is that it is inevitable. This does not only include your death, but your family members, such as your grandmother, daughter, son, and parents. If you, or your (especially older) family members have not prepared a will, then you are jeopardizing both your own wishes and the outcome for those you love. This could be especially important for parents.
If you haven’t had a will prepared, then your children’s future can be in serious jeopardy. For example, many assume that their property will pass automatically to their children, but the Oklahoma courts may have other ideas. Other family members, like a new spouse or a child you gave for adoption, may go to the courts and inherit money and heirlooms that you intended for your children.
The most extreme and important factor to consider will likely be that of child guardianship. If you have children, or intend to have children, a will allows you to ensure that your children are raised by people you trust and in a way you deem appropriate. A will allows you to specify their guardians, should you die. Without a will, the courts will decide who will take control of your children should you pass away, and who wants a court to decide the future of their children’s care?
Sadly, another case where a will is needed is when both spouses being killed at the same time. In a circumstance like that, there is no surviving spouse to take care of the children, explain what should happen to them, nor have a say in the distribution of assets. As expected, the courts will have more of a say in the distribution of your estate than you would probably want.
Creating a will doesn’t have to be a exasperating, complicated activity. A will is not generally very expensive, and a trustworthy wills and trust lawyer can tell you your exact benefits in creating a will. Skillern Law Firm can help you create your will, and any other estate planning document you may need to ensure your family and assets are safe from court interference. Undoubtedly, it is not ideal to spend your time imagining what would happen to your family and assets after you have passed away, however, doing so now can make an incredible difference later.
If you are interested in other estate planning documents, or how they can help you, read other posts on Tulsa Estate Planning Blog.