For parents it is important to have a will. This document becomes the foundation of a solid estate plan. A will lists who you want to take your property and includes the names of guardians for minor children or a disabled adult child.
One of difficult planning decision is choosing a guardian for young children or a disabled child. Various options exist such as designating different people for care giving versus managing finances. Occasional review of the designations is also important.
Dying “intestate” or without a will means the state steps in and decides these matters for you. Failing to decide on guardians, could mean a family fight over who cares for the children.
Planning for a child with special needs, such as severe autism, who will not be able to support himself or herself in adulthood requires a “special-needs trust.” Assets passed directly to the child could affect eligibility for government benefits. Assets in the trust would supplement basic needs.
A trust is also a way to protect an inheritance. If an adult child suffers from mental illness, it might not be wise to leave a lump sum that might be squandered immediately. Designating a responsible person to serve as trustee could make the inheritance last as an emergency fund for instance.
Sometimes it takes an upcoming international vacation or a cross-country family road trip to get started with estate planning. Putting a plan in place should be on the list of priorities especially with young children or a child with special needs. Working with an experienced estate planning attorney is one way to ensure your wishes are in writing and provide guidance to loved ones.
Source: The Wall Street Journal, "Getting Your Estate Plan Right," Carolyn Geer, August 2, 2014.