It can be hard to think about planning for the unfortunate or unforeseen, but it is absolutely critical to avoid an even worse situation if the worst comes to pass.
Fortunately, there are some very simple planning items to think about which will help jumpstart the process of putting in a plan that will not only achieve what you want for your family but avoid wasted time and money that would be spent if you do nothing. The truth is that you do have control over the outcome of some of life’s most difficult situations. You just need to get started.
Think about guardianship: Start to think about who you want to care for your children after you are gone, or if you are incapacitated. The truth is that this is an inherent blind spot in many estate plans and parents don’t realize that, even if you name guardians in your will, your kids could still be at risk of being taken into the care of strangers. Proactive planning starts with thinking about the values you want for your children. Who holds those values? Are they willing to care for your kids? If not, who should be “backup” guardians? If you name a married couple, what happens if one of them are unavailable do to injury, death, or divorce? Start asking these questions now so you can more easily structure your childcare situation under a guardianship plan.
Inventory your assets and liabilities: Take stock of major assets like real estate, vehicles, collectibles, and collect the deeds for each. Determine the value of your cash, investment accounts, and any other income generating assets. Create an inventory of everything you will be passing on to others so it can be categorized and accounted for in your planning documents. Be aware also of your debts, and how those will be paid off. Do you have a strategy for that?
Think about distribution scenarios: What should happen when you die, when your spouse dies, and when you both die? What assets will your loved ones need? Do you have enough insurance coverage for your spouse and children? How will you shield assets from your creditors, or your beneficiaries’ creditors? If you are creating a trust, who will serve as trustee? When and how will distributions be made under a trust? Many parents want to make sure their children have access to trust distributions at certain times during their lives. Do you want to make distributions contingent on the occurrence of certain life events, on reaching certain ages, or at the discretion of a trustee? All of these things are important starting points to start your planning journey.
Decide on medical preferences: You should also think about what type of care you want to receive in the event that you become sick and incapacitated. This is important since it helps prevent the situation of you saddling your loved ones with the stress and potential intra-family strife, that could come from trying to determine what you would want in that situation. Creating advance health directives like a “living will”, along with establishing a medical power of attorney will go a long way to alleviating these problems.
Have your documents drafted: After giving thought to these issues, the most important step in this process is to meet with a lawyer to answer your questions and structure a plan that is prepared specifically for you and your situation.
For individualized guidance and drafting of your planning documents, contact Mattiace Tetro, LLC.