By Attorney Maria Baler (April 2013)
If you are a parent, one of the most important things you can do for your children is plan for the fact that you will not be around forever. This is a very hard thing for most parents to do. On an emotional level, it is difficult to even consider the possibility that you may not be there for your children. On a practical level, parents are busy people – our lives are consumed with working to provide for our children’s basic needs, driving them where they need to go, rooting for them on soccer fields, cheering for them in gyms and auditoriums, packing lunches, cooking healthy dinners and imploring our children to eat them. Of all of the things we do for our children, estate planning may be what matters most if the worst happens. Here are five simple planning steps you should take for your children.
1. Write a Will. A Will is an important document to have for many reasons. For parents, a Will is your opportunity to choose the person who will care for your children. The guardian of a minor child decides where the child will live, where the child will attend school, what type of health care the child will receive, and other day-to-day decisions regarding a child’s care and upbringing. If you do not have a Will naming a guardian for your child, family members or others may “petition” the court to be appointed the child’s guardian, and the court will have the difficult job of choosing among those who ask to be appointed. Your Will can also name the same or a different person to serve as the child’s “conservator” who will have the job of receiving and managing the child’s assets (including any inheritance they receive from you) until the child is 18 years of age.
2. Create a Trust. Trusts are not just for those with millions of dollars. Think about the assets your children would receive if you passed away – consider your home, your life insurance, your retirement accounts, your savings and investments. Then think about how you feel about your children receiving those assets at age 18. If this thought makes you uncomfortable, a Trust should be a part of your estate plan. A Trust puts you in control of who will manage your assets for your children and at what age or ages your children will be entitled to receive those assets. While funds are held in trust for your children’s benefit, the Trustee can use them for a child’s education, living expenses, health care expenses, or for other purposes you specify.
3. Name a Temporary Agent. Massachusetts law allows parents to appoint a person to temporarily make decisions for a minor child on matters such as the child’s care or property, including health care decisions that may be required, in the event of the parents’ death or unavailability. This appointment must be made in writing, signed with certain formalities, and is effective for a period of up to 60 days. Such an appointment is useful in the event you are unavailable due to travel or illness or in the event of your death and before a legal guardian can be appointed by the Court.
4. Obtain or Review Life and Disability Insurance. All parents hope they will be there to provide for their children, but the reality is this is not always the case, which is why disability and life insurance are important parts of a complete plan to protect young children. Disability insurance can provide your family with a stream of income to replace, at least in part, the income you could not provide if you were disabled. Life insurance can be a much needed resource to provide for a family’s living expenses, or for larger expenses down the road. If you have this coverage in place, take the time to review it to be sure the coverage is adequate for your family’s current needs. These resources may allow your children to have the life you planned for them, even if something unexpected happens to you.
5. Plan for a Child’s Disability. Planning is especially important for parents who have a child with a disability. Receiving inherited assets may cause a child to lose eligibility for public benefits, including health insurance benefits that may provide otherwise costly services or treatments. Proper estate planning will safeguard a disabled child’s inheritance for the child’s benefit in a way that will not disqualify the child from receiving needed benefits, either at that time or in the future. If you have a child with a disability, it is also important to speak to family members whose estate plans may benefit the child, to ensure that those plans also include proper provisions.
Set a goal of completing one or more of these steps within the next six months, or by the end of the year, or before your next big trip. Any planning you undertake will benefit your children if the unexpected happens. And once you have a plan in place, don’t forget to review it periodically and make changes as needed. Plans created when your children are young will not necessarily be appropriate when they are teenagers or in their 20s, when they still need the benefits and protection a good estate plan can provide.
Attorney Maria C. Baler is an estate planning and elder law attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information, visit www.ssbllc.com or call (781) 461-1020.