Client question: The client calls who is married and has a minor child age 2 that wants to proceed with estate planning.
Estate planning
Tom and Mary are married with one minor child, Jason, age 2. Although they do not have a large amount of assets, they do have employee sponsored 401k plan and a house with a mortgage, but a large life insurance policy on the husband.
For a couple with a minor child is to prepare a Will, Living Will, Health Care Power of Attorney and Durable Financial Power of Attorney along with a Probate Avoidance Trust for the benefit of the minor child in the event of a common death of the couple. The Will, Living Will, Health Care Power of Attorney and Durable Financial Power of Attorney are basic documents that everyone over 18 requires.
In this instance, the Will would first grant all assets to the spouse, but in the event of a common death would pour over all assets into the Probate Avoidance Trust.
- The Living Will allows for end of life decisions.
- The Health Care Power of Attorney allows for medical treatment decisions in the event that you are incapacitated.
- The Durable Financial Power of Attorney allows for financial decisions to be made in the event you are incapacitated.
In a common death, the Probate Avoidance Trust allows for the assets of the couple to be collected and held in Trust for the minor child.
The Trust provides for monies to be paid for the benefit of the minor child, in terms of support that is necessary to raise the child.
It would include payment for:
- Caretakers;
- Clothing;
- Food;
- Transportation;
- And education, including, but not limited to, post secondary education and the like.
The Trustee handles the money and a suggested Guardian would raise the child. The Trustee can be the Guardian, but sometimes the couple chooses to appoint a family member with more monetary experience as Trustee. Then they appoint a family member with more child rearing experience as Guardian.
These documents are all amendable and modifiable, so that they can be prepared in light of a 5-10 year time horizon. This makes using grandparents as Trustees and/or Guardians is acceptable.
For more information on estate planning, please contact the elder law office of Browning & Meyer Co., LPA today.