Welcome back for Part III of this series of blog posts, inspired by a book written by a fellow Wealthcounsel member, Laura K. Meier, titled "Good Parents Worry, Great Parents Plan". In Parts I and II we talked about how if you are a Young Family with kids, you need to protect your kids in the event something were to happen to you and your spouse, and your plan must be something that can go into effect immediately! That day! Because even brief delays can result in your kids being placed into Foster Care until the Court can get around to appointing a guardian for your kids. We talked about how the Florida Statute allows parents of young children to use a signed and witnessed document to nominate a "Preneed Guardian for Minors" and a power of attorney to allow a third party to make medical decisions for your children. These provisions allow you, as the parent, to put a legal plan into place which allows someone you choose and trust to immediately take on the responsibility of caring for your children if something were to happen to you.



Now we talk about the money.



Young Families often don't have a lot of assets saved up. It's one of the reasons why so many Young Families don't prepare estate plans, they think they don't have a large enough "estate" to plan for! In Part I we talked about how even if you do have assets saved up, without a will or a trust, the Probate Court will appoint someone to administer those funds until your kids reach the age of 18, at which time they get a payout, in a lump sum, which most would agree is likely a very bad time and age to receive full control over an inheritance, even a modest one.



There are two things you likely need to address this. The first is you need to create a Trust and appoint your own Trustee to administer your assets, and spend them for your kids, in the way you think those funds should be spent. A Trust can also be designed to pay out either interest payments, or principal disbursements to your kids at times and for reasons you think are best. For example, you can provide that any principal assets left in your Trust after your kid(s) reach the age of 18 should be used for continuing their education, starting a business, buying a home, getting married, or any other purpose you would have wanted to financially support had you still been alive to do so. You can set the conditions for final disbursement of each child's "share" of their inheritance, such as reaching a certain age, or a series of ages. You can even provide that any unused balance of the Trust be kept as a "Dynasty Trust" for the care and maintenance of following generations (subject to certain time limitations, as the State doesn't want you to tie up money in trusts forever). Wisely designing your Trust, you can make sure the money is not wasted but rather is used in the best possible way to give your child every advantage you would have wanted them to have if you had survived. Also, you can design the Trust in such as way as to protect your child's inheritance from third parties who may have ill designs upon them, such as scam artists, creditors, Bankruptcy Trustees, Judgment holders, or possible future failed marriages. This way, your child's inheritance will be used for your child's benefit, but not to pay for your child's mistakes or misfortunes.



I said there were two things you likely need, and as you were reading the paragraph above, you were likely thinking "Yeah, that sounds great, but my 'estate' right now won't even pay for a used car, never mind college, a business, a home and all that other stuff.". Well, the second thing you need to consider is obtaining life insurance, to make sure there are funds available to provide for your children after you are gone. Now, in this series of articles we have been talking about what happens if something happens to BOTH you and your spouse. This opens up an inexpensive way to solve the financial problem. There are life insurance products known as "Last To Die" policies, which insure two lives - yours and your spouse's. That way, the policy only pays out upon the death of the second to die. These policies are often very inexpensive, since the chances of both you and your spouse passing away while your children are still minors is very small. While you may certainly consider all of the other advantanges to be offered by quality life insurance products, at the very least, Young Families should consider obtaining a "Last To Die" policy, which can be used to fund your children's financial needs well into the future. Given the low cost, there is very little reason not to obtain such a policy.



May I give you a final bit of advice? It's something you can do right now, even before you see your friendly neighborhood estate planning attorney. Create an emergency plan! When you go out (date night is important, right?) don't just give the babysitter your cell phone number for "emergencies". She calls that if she can't figure out the remote control. That's not an emergency. You need to have your list of "Go To" people lined up, by name and number. The people your sitter can call at 2:00 a.m. when you and your spouse failed to show up. That emergency list should be handy, and given out to anyone who has custody of your kids - School, the after school Karate instructor, Vacation Bible School or day camp during the summer, etc. Write it down on index cards and just keep them in both of your cars, and hand them out to whomever you are trusting with your precious kids. If your kids have their own cell phones, put in a contact for "AAAEmergency Contact - John Smith" so that the number is right at the top of the contact list.



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Edmund Gegan