by BarryEstate Planning for Young Families: Why It’s Never Too Early to Start
For many young families, estate planning can feel like something to think about later in life. But the truth is, the sooner you start, the better prepared you’ll be to protect your loved ones and secure their future. Estate planning is not just for the wealthy or older adults—it’s a critical step for parents who want to ensure their children’s well-being and their assets are managed according to their wishes.
At Edwards Law, we understand the unique needs of young families and are here to guide you every step of the way. Let’s explore why estate planning is essential and what steps you can take to get started.
Why Estate Planning Matters for Young Families
- Guardianship for Minor Children
As a parent, your top priority is your children’s well-being. If something were to happen to you, who would care for your kids? An estate plan allows you to name a legal guardian to ensure your children are raised by someone you trust. - Financial Security for Your Family
Estate planning ensures your assets are distributed to your children or loved ones in a way that aligns with your wishes. This can include setting up a trust to manage finances for your children until they are old enough to handle them responsibly. - Avoiding Probate
Without an estate plan, your assets may go through probate, a lengthy and costly legal process. A properly structured plan, including tools like a trust, can help your family avoid unnecessary delays and expenses. - Peace of Mind
Knowing that your family’s future is secure gives you peace of mind. Estate planning provides clarity and eliminates uncertainty, allowing you to focus on what matters most—spending time with your loved ones.
Key Elements of Estate Planning for Young Families
- Last Will and Testament
A will outlines how your assets will be distributed and who will care for your children. It’s the cornerstone of any estate plan for young families. - Trusts
A trust allows you to manage how and when your assets are distributed to your children. It can also provide financial support for their education, healthcare, and other needs. - Durable Power of Attorney
This document designates someone to handle your financial affairs if you become incapacitated. It’s an essential part of ensuring your family’s financial stability. - Advance Directive for Health Care
These documents outline your medical preferences and designate someone to make healthcare decisions on your behalf if you’re unable to. - Life Insurance
Life insurance is a vital part of estate planning for young families. It provides financial security for your children in the event of your untimely passing.
When Should You Start Estate Planning?
The answer is simple: now. Life is unpredictable, and having a plan in place ensures that your loved ones are protected no matter what happens. Even if your estate is modest, creating a plan early establishes a strong foundation that can be adjusted as your family grows and your financial situation changes.
Get Started Today with Edwards Law
Estate planning for young families doesn’t have to be overwhelming. At Edwards Law, we take the time to understand your family’s unique needs and create a customized plan that gives you peace of mind.
Contact us today to schedule a consultation. Let’s work together to protect what matters most—your family’s future.
by BarryReviewing Your Estate Plan after the Death of a Loved One
The death of a loved one is never easy. Regardless of your relationship with the deceased (for example, a relative, significant other, or close friend), you need space and time to process and grieve your loss. Once you have had time to cope with all that has happened, you should consider updating your estate plan in light of your loved one’s death.
Although your estate plan primarily focuses on what will happen if you become incapacitated (unable to make or communicate your wishes) or die, the death of a loved one can have a significant impact on your planning. If you have an estate plan, one of the first things you need to do when a loved one dies is to review the documents with the following questions in mind:
Was your deceased loved one named as a beneficiary of money or property under your will or revocable living trust? If so, do your documents address what happens to that money or property should your loved one predecease you?
One of the main objectives of establishing a will or revocable living trust is to create a plan for what will happen to the things you own at your death. If you have strong feelings about who should receive your money and property, you must name who will inherit from you and also who will inherit the money and property if your first choice dies before you.
If your will or trust does not list a contingent (backup) beneficiary, the gift in question is canceled when the first-choice beneficiary passes away, and the accounts and property you wanted to leave to your now-deceased loved one become part of your general estate and will be distributed according to the remaining terms of your will or trust. This cancellation can be problematic if your beneficiary has a spouse, children, grandchildren, or other loved ones whom you would have wanted to receive the beneficiary’s inheritance instead.
Some states have enacted antilapse laws to protect against this result. In these jurisdictions, the beneficiary’s heirs will receive the gifts. There are a few caveats and distinctions from jurisdiction to jurisdiction. For example, some states limit the heirs who can benefit from antilapse laws to blood relatives.
Is a trusted decision-maker now deceased?
As part of your comprehensive estate plan, you likely selected several different important decision-makers to act on your behalf if you become incapacitated (agents under your financial and medical powers of attorney and a successor trustee) or to wind up your affairs after your death (a successor trustee, personal representative, or executor). If your deceased loved one held any of these positions, make sure a backup was nominated. If not, you need to update the affected document to include a new first choice and at least one alternate. If you have already named a backup in the document, you will want to update your document to name your backup as your new first choice and remove your deceased loved one’s name to prevent confusion when a third party reviews the document.
Personal representative (also known as an executor). This trusted individual, appointed in your last will and testament, is responsible for collecting all your accounts and property, paying your outstanding debts and taxes, and distributing your money and property to your named beneficiaries after your death. This person’s task is to wind up your affairs, which can be time-consuming. If your chosen personal representative dies before you and there is no named backup at the time of your death, the probate court will use your state’s laws to determine who is next in line to serve as personal representative.
Co-trustee or successor trustee of your trust. Serving either with you (as co-trustee) or after you become incapacitated or die (as successor trustee), this trusted person or entity is charged with managing, investing, and distributing the money and property from your trust to you during your lifetime (if you are incapacitated or are otherwise unable to act as trustee) and to your chosen beneficiaries after your death.
If your deceased loved one was a co-trustee with you, you should review your trust agreement to see what happens next. There may be a provision that either allows you to continue serving as the only trustee, names a specific person to step in and serve with you as co-trustee, or describes how to determine who your new co-trustee will be.
If your deceased loved one was named as your successor trustee, nothing noticeable will happen with respect to how your trust is managed right now. However, if you become incapacitated or die and there is no successor trustee, your loved ones must look to your trust agreement for guidance on filling the vacancy. Your trust may provide that a certain number of your beneficiaries can appoint a new trustee without court involvement, or your trust might require that the court approve any new trustee. The outcome will depend on the trust’s wording and your state’s laws. Because your trust is revocable and amendable during your lifetime, it is best to update your trust to appoint a new successor trustee or change any of these provisions as needed while you still have the ability to do so.
Agent under a financial power of attorney. Your agent is an individual you choose to manage your property and finances (such as communicating with your mortgage company, paying your bills, or accessing funds in your bank account for your care) on your behalf. If the person you selected is deceased and there is no named backup, no one else can act on your behalf when needed. If you become unable to manage your property and finances without appointing an agent in a financial power of attorney, your loved ones will have to go to court and have someone appointed by a judge to take care of your financial and property matters. The judge will make this determination based on state law, which prioritizes a spouse or blood relative serving in this role, and the person selected may not be the person you would have chosen. Not only is this process time-consuming during a stressful time, but it can be expensive and exposes the details of your condition and family dynamics to the public.
Agent under an advance directive for healthcare. Your agent under your advance directive for healthcare is typically authorized to make decisions or communicate your medical wishes in the event you are unable to do so yourself. Because this person can act only when you cannot, you may not feel an immediate need to update your advance directive for healthcare if your chosen agent has passed away. However, if you have an accident, become incapacitated, or are otherwise unable to communicate your medical wishes and you do not have an agent who can act for you, your loved ones must go to court to have a guardian appointed before anyone can speak on your behalf. The judge will look to the standards and guidelines provided under state law to aid them in appointing the appropriate person, who may not be the person you would have chosen to make your decisions. Second, the selected person may not know your wishes about the medical care you want to receive.
Guardian for your minor child. You have likely invested a lot of time and consideration in deciding who you would like to serve as the guardian of your minor children if you and the children’s other parent are unable to care for them. If the loved one you have selected has passed away, it is imperative that you update this selection. While your circumstances may vary, if your chosen guardian is unable to serve for any reason, and you have no alternate guardian nominated, the probate court will determine who will raise your child. As with other roles, the selected person may not be the one you would have chosen, and absent input from you, the judge may have limited information when making this critical decision.
We Are Here to Help
We understand that you are grieving the loss of a loved one. When you are ready, we are here to help you take the next step in your estate planning journey, whether you are starting, completing, or updating your estate plan. Contact us today to schedule your in-person or virtual appointment.