We all know the inevitable, every story, every life, has a beginning and end. With the birth of a child, it creates the beginning, with the passing of a loved one is the ending and with the circle of life, a loved one becomes pregnant, then life begins again.
With beloved family members, it becomes difficult to discuss end-of-life decisions. Are you just going to walk up to a loved one and ask, “Did you fill out your beneficiary designation forms? Did you speak with an estate planning lawyer? Can you tell me about your retirement plans?” It’s especially difficult if you have minor children. Are you going to ask them who they want to live with if their mom or dad passes away? Probably not.
Discussing estate planning for parents is important. At my office, I always come across clients who come into my office that are retirement age with no minor children. Since COVID-19, I have seen an increase in estate planning clients from all backgrounds and ages and I have seen an increase in young parents with minor children and what estate planning tools are available to them.
I have also seen an increase in blended families — these clients have had past marriages with children and now are remarried to a new spouse with children. This has created a new wave of surviving spouse’s rights and tools we can execute to address making sure your children received something when the surviving spouse is not the biological parent to your children.
So, what happens parent dies who has minor children? We always have to look to see if there is a surviving biological/paternity established parent, that parent must be notified if there has been a passing of the other biological parent and there is a court process that the surviving parent must go through in order to obtain custody or terminate child support.
A lot of clients ask me if we can name someone in their will who can take custody or guardianship of a minor child/children until they reach the age of 18. We can draft a will that nominates a person who can take custody or guardianship of clients and we always advise to name a backup person if the first person you name doesn’t want to take on the responsibilities.
So what can parents do now that can help provide an easy transition if they were to pass or become incapacitated? There is a wonderful article that I came across that discusses power of attorney, creating living documents and more. Power of Attorney is valid the day that you sign it unless you specifically state otherwise. My office executes these documents on a daily bases.
With the financial power of attorney, the agent you appoint to help manage and pays bills, also known as an attorney-in-fact which is a person who is authorized to act on behalf of another person, is good the day that you sign it unless you state otherwise. It’s a great tool to help oversee your life insurance, term life insurance and 401(k) plans.
Clients can also sign their Health Care Power of Attorney, which is when you name an agent to act on your behalf for your medical decisions.
If you have minor children, having a financial power of and/or durable power of attorney can help ensure the person whom you appoint can help take care of your children when you’re not able to do so. These documents have durable powers which means your documents remain in effect if you become incapacitated and unable to handle matters on your own.
A lot of my clients are also not aware of the types of trusts that are available to them. There are various trusts that can be executed in order to help manage your estate if you were to pass in an untimely manner.
There are so many benefits to creating a trust, such as tax deductibility to make sure that you don’t pay tax if something were to go wrong. An estate tax also needs to be addressed and a trust can help avoid this issue as well. You can also name a trust as a beneficiary to any Roth IRAs or simple IRAs clients may have. A trust can also help avoid death taxes that clients are concerned about if they leave any minor children. A client can also execute a testamentary trust, which is a trust that arises upon the death of the testator and is specified in his or her will.
In addition to the power of attorney’s forms, the client can also review and/or execute life insurance policies. There are so many types of life insurance policies available to clients. Clients can make a selection on which policy is the best for them. They can sign an executed trust which is designated as a beneficiary of the insurance policy and when the policyholder passes, then the trust controls the life insurance money.
It is so important for clients to review their beneficiary designations to make sure they are up to date and are in accordance with their wishes.
Amy Turos brings extensive experience in family law, estate planning and motor vehicle accidents throughout Portage, Trumbull, Geauga and Summit counties.