It may come as a surprise to you that more than half of all parents have no estate plan in place — not even a basic will. As your family celebrates the wonderful aspects of their lives, it may seem like an awkward or remote time to focus on an untimely death or incapacity. But, with so much at stake, one of the most responsible things new parents can do is make sure that their estate plans are in order to ensure that, in the event of the unthinkable, their children will receive the sort of care they would want.
One of the vital benefits of your estate plan if you have minor or disabled children is the option to nominate a guardian. If you have discussed with trusted relatives or friends their willingness to care for your children if tragedy were to befall you (or you and your spouse), nominating a guardian in your will allows you to communicate this to the courts. In Wisconsin, the court will appoint the guardian you name in a will unless it is not in the best interest of the child.
Additionally, your estate plan gives you the chance to control how your children receive their inheritance. Perhaps you plan to leave your children a substantial amount of wealth upon your death, but you are concerned about your child or children assuming complete control over the full amount immediately upon their eighteenth birthdays. With detailed planning, you can avoid that scenario. You can create a living trust that continues to hold your children’s wealth until the dates you prescribe. Until that time, the trustee of the trust manages the assets for your children.
You can also provide money and incentives for your children to go to college. There are many ways to write trusts that encourage beneficiaries to make certain choices in their lives, and to achieve certain milestones.
Additionally, you can create a trust within your will to accomplish similar ends. A testamentary trust is a trust that comes into effect when your will is probated. You can, in your will, state what assets go into that trust, when those assets are to be distributed to your child and who shall manage those assets (as the trust’s trustee) until the time the trust disburses them to your child. In one famous example, the late singer Whitney Houston established a testamentary trust for her only daughter, Bobbi Kristina. Houston’s will established three distribution dates (Bobbi Kristina’s 21st, 25th and 30th birthdays,) also stated the portion of Houston’s estate she should receive at each milestone and named the trustees who would manage the assets (Houston’s mother and sister-in-law).
Testamentary trusts differ from living trusts in substantial ways. A testamentary trust may only come into effect after a will has been probated, while living trusts avoid probate. In some cases, crafting a plan that avoids probate may offer many useful benefits. To get the highest caliber advice about what type of plan will best allow you to provide for your children, even in the unlikely event of your untimely death or incapacity, contact estate planning attorney Daniel J. Krause of Krause Law Offices LLC. He has the knowledge and experience needed to help protect your family. Consult Attorney Daniel J. Krause to get your plan started today.
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