For parents with young children, one of the biggest fears is what will happen to the children in the event of the death of one, or both, of the parents. Although no one can prevent tragedy from striking, careful planning can provide you the peace of mind to know that your wishes with regard to your children will be followed. Creating a Last Will and Testament is the key to that peace of mind.

There are a number of reasons why creating a Will is important when you have young children. One practical consideration is avoidance of probate. In most states, when a decedent dies without leaving a valid Will behind, the estate is required to pass through the legal process known as probate in order to determine the intestate heirs. Probate can take months to complete leaving those assets that you did intend to leave behind for your children inaccessible until the probate process concludes.

Along with avoiding probate, your Will can be the only opportunity to choose a guardian for your children. In a situation where the other parent is not living, or not in the child’s life, or where both parents die at the same time, the court will have to appoint a guardian for any minor children.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

If your children are minors, you should consider creating a guardian plan. A guardian plan allows you to state the person you prefer your children to live with in the event that you and your spouse pass away.

List Options

The first step of your guardian plan is considering your options. You and your spouse should list every family member and every friend of the family that is a possible guardian. Don’t exclude anyone until you have completed your list.

List Your Desires

Next, you and your spouse should make a list of all of the features you desire the caregiver to have. Do you prefer for the caregiver to practice a certain religion or to be married instead of single? As you enumerate your wishes, rank which are most important to you. This will help you during the process of narrowing down your list of prospective candidates.

Narrow Your Options

Once you have decided what attributes of a caregiver are most important, you can begin to narrow down your list of possibilities. Get rid of the most obvious non-candidates first, but take your time when your list reaches five to seven people. Your final list should contain two to three names. Having one or two back-ups is important in case your first choice should become unavailable.

Speak with Your Family

Once you have chosen a guardian and a back-up guardian you should speak with these individuals to confirm their feelings on the choice. This gives them the opportunity to advise you if they are not up to the task or if they have obligations that would keep them from taking the position. If your guardian choice is unavailable, you can move to your back-up and reevaluate your list.

During this time you should also speak with your children and possibly other family members to explain your decision and get their input.

Create Your Plan

Once you have your guardian choice firmly in mind, you can put it into writing. Whether you use a Last Will and Testament or a Revocable Living Trust to name your guardian, the most important fact is that you do so to ensure your children’s safety and happiness.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Life Insurance is a contract that requires your insurer to pay a designated beneficiary a set amount of money upon your death. If you are a financial provider for anyone in your life, a life insurance policy may have many advantages for you and your loved ones.

Quick Funds

After your death, a life insurance policy can be quickly collected by the selected beneficiary. He or she only needs to provide a copy of your death certificate. While they wait for your estate to settle, these quick funds can allow your family to pay for a number of expenses including funeral costs and medical bills.

Replace Your Income

If you pass away, how will your spouse pay the bills? If you earn some or all of your family’s income, a life insurance policy may replace your paycheck upon your death. This may help your spouse and children avoid a change in lifestyle including moving to a smaller home or giving up many of the conveniences they are familiar with.

Provide for a Special Needs Loved One

If you have a family member with special needs, and you are a source of income for that person, a life insurance policy can allow you to provide for your loved one after you are gone. If your loved one also relies on government assistance, you may wish to name a Special Needs Trust as the beneficiary for your policy. Leaving the policy directly to your family member may jeopardize his or her aid.

Pay for Extras

Beyond helping your family cover living expenses, your life insurance policy may also help pay for additional financial needs such as higher education. If you want to make sure your children or grandchildren can afford college, you might wish to sign up for a larger policy. You may also choose to have your policy pay into a Trust that will cover education costs when the time is right.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

A Common Pot Trust is a single trust that parents create to provide for all their children until each reaches the age of majority.

For example, if you have three children – ages 5, 6 and 9 – you could set up a Common Pot Trust to cover all three. All the assets would be funded into the single trust and a trustee would be named to oversee the trust and manage the funds.

The unique thing about this type of trust is that the trustee has final say on how the assets are spent. He or she is not required to spend the same amount on each child so if your youngest has a learning disability and requires special tutoring, the trustee can pay for that out of the trust without setting aside equal amounts for the other children.

In addition to this extensive flexibility, a Common Pot Trust also continues to hold all the assets until the youngest child has reached a specific age, such as the age of the majority. So, in the above example, the funds would not be divided among the children until the 5 year old turned a specific age, such as 18.

Common Pot Trusts are a simple way to provide for several children at once – just be sure that the Trustee is extremely honest and reliable to avoid any potential fraud or mismanagement of the trust funds.

A Common Pot Trust is a single trust that parents create to provide for all their children until each reaches the age of majority.

For example, if you have three children – ages 5, 6 and 9 – you could set up a Common Pot Trust to cover all three. All the assets would be funded into the single trust and a trustee would be named to oversee the trust and manage the funds.

The unique thing about this type of trust is that the trustee has final say on how the assets are spent. He or she is not required to spend the same amount on each child so if your youngest has a learning disability and requires special tutoring, the trustee can pay for that out of the trust without setting aside equal amounts for the other children.

In addition to this extensive flexibility, a Common Pot Trust also continues to hold all the assets until the youngest child has reached a specific age, such as the age of the majority. So, in the above example, the funds would not be divided among the children until the 5 year old turned a specific age, such as 18.

Common Pot Trusts are a simple way to provide for several children at once – just be sure that the Trustee is extremely honest and reliable to avoid any potential fraud or mismanagement of the trust funds.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.