Guardianship Planning
Why it should be at the top of every parent's to do list!
Our family members and loved ones are our most important assets, yet planning to ensure that they will be protected and provided for in case of a disability or death is often at the bottom of parents' TO DO LISTS! Estate planning is something people know they should do but is also something people put off. Two questions to ask yourself are:
Question 1
Why is it that we are so careful in interviewing and selecting our childrens' babysitters, day care providers, teachers, etc. yet neglect to formally nominate guardians knowing that failing to do so will potentially result in a stranger (probate court judge) making this extremely important decision for us?
Question 2
Why is it that our babysitters and day care providers get more detailed instructions for the care of our children than our guardians?
Once we sit down and think about these questions, it seems obvious why guardianship planning is so important and should be at the top of every parent's to do list. Often the most important reason to do estate planning is not to save on estate taxes or probate fees, but to protect our children.
What Does Guardianship Planning Entail?
Leaving instructions! The goal is to ensure that whether the children are in our care or the care of a guardian, they will be raised the same way, with the same lifestyle, values and ethics.
Important Issues To Address In The Planning
• Who controls and manages the assets for the children (TRUSTEE)
• Who physically provides day to day care for the children (GUARDIAN)
• What values should be instilled in them (I.E. Raising financially responsible
children who understand the value of a dollar and have a strong work ethic)
• Creating incentives for them to accomplish certain goals (i.e. pursue higher education,
obtain a post high school degree)
• Protecting your children from overspending, creditors, divorce, etc.
How Is This Accomplished?
Step 1: Understanding what things are important to you, your goals for your children
whether it is: education, work ethic, community service, philanthropy,
entrepreneurship, etc.
Step 2: Understanding your children: their personalities, strengths and weaknesses,
and spending habits, etc.
Step 3: Creating instructions and crafting a plan that will accomplish your goals and is
custom tailored for your family.
What Is Estate Planning?
Estate planning entails leaving detailed legal instructions for the administration, management, and distribution of assets upon a disability or death. Estate planning is used to ensure that the passing on of assets is done in a smooth, efficient, and cost effective manner. However, estate planning is much more than just having the right legal documents in place to avoid probate and minimize estate taxes. The goal is to provide peace of mind that loved ones are protected and provided for; children are properly cared for, assets are managed properly, wishes are carried out, and values are passed on.
What Is The Difference Between A Will And A Trust?
A Will is simply a set of legal instructions directing the Probate Court in the administration and distribution of assets when a death occurs. Having a Will is your way of making choices about what happens to your assets after death instead of relying on the state to make them for you. It is important to note that having a Will-based estate plan guarantees that the Probate Court will be involved in the administration of assets.
A Living Trust is a set of legal instructions detailing how assets should be administered, managed, and distributed upon a disability or death. While Will-based estate planning focuses solely on death, Trust-based planning involves planning for incapacity as well as death. Generally Trusts are used to leave more specific and detailed instructions than a Will and avoid Probate. When a person passes away, a Trust is administered privately, generally through an attorney's office, and there is no need to involve the Probate Court.