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Estate Planning for Young Families: Planning for Your Children’s Future
October 28th, 2024
It’s never too soon to create an estate plan. In fact, estate planning for young families can help ensure you have peace of mind that your children will be taken care of in the event of the unexpected. A comprehensive estate plan can address the issue of who will raise your children if you pass away or become incapacitated. You can also specify how — and when — your children would receive their share of your estate.
Create a Last Will and Testament
A last will and testament is the foundation of estate planning for young families. It names an executor who you would like to manage your estate after your passing and dictates how you would like your property to be distributed. Regardless of your age or how healthy you are, a will can help to plan for unanticipated circumstances. The document can safeguard your children’s future, provide for their financial stability, and ensure their needs are met. Critically, if you have a child with special needs, drafting a last will and testament can be crucial to ensure they are cared for properly. In addition, a will can help to avoid the family disputes and disagreements that could arise if your wishes are not clearly documented. If you do not have a will in place, your assets would be distributed in accordance with Oregon’s intestate law. This could result in consequences you had not intended — and your children might not receive the assets or property you would have wished them to have.Designate a Guardian for Your Minor Children
Part of estate planning for young families is carefully considering who you would like to be guardian for your minor children. This is the person who would take over for you if you or the other parent could not raise your children due to illness or death. You can designate this individual in your will, as well as name different guardians for each of your children if that would be in their best interests. When naming a guardian for your children in your will, it’s essential to consider things such as:- Whether you trust that the guardian would raise your children in accordance with your values
- The individual’s willingness to step in as a guardian
- Where the guardian lives
- The guardian’s maturity and age
- The guardian’s financial stability
Name Someone Who Will Manage Your Children’s Inheritance
Just as you should name a guardian who will take care of your children, you should also choose someone who would manage their inheritances if you pass away before they turn 18. The Uniform Transfers to Minors Act (UTMA) allows minors to own assets without a trust document or the appointment of a conservator. Under the rules of the Act, the assets that belong to the child would be controlled by a custodian before the child reaches a certain age — parents can choose an age between 18 and 25, at which time the assets would be transferred. Without choosing a custodian and specifically mentioning the UTMA in your last will and testament, the court would appoint someone to manage your children’s property. This may be a stranger or someone you had not intended. It’s vital to select someone who is trustworthy and financially responsible.Consider Using Trusts
There are a wide range of trusts that can be used in estate planning for young families. Whether it is used for college funds, to protect assets, or another purpose, a trust can allow you to retain control over how the assets are distributed to your children — and safeguard their wealth into the future. There are two broad categories of trusts that can be used, including revocable trusts (which can be amended during your lifetime) and irrevocable trusts (which cannot be changed once they are created). Creating a trust has many benefits, in addition to asset protection. It can make your children’s inheritance last longer by preventing them from acquiring one lump sum. It can also alleviate the estate and gift tax burden that might be placed on your child. Additionally, if any of your children have special needs and require long-term care after your passing, a special needs trust can be put into place. This can allow you to provide for your child without affecting their eligibility for government benefits.Contact an Experienced Oregon Estate Planning Attorney
If you would like to learn more about the process of estate planning for young families, a skillful attorney can help. Based in Salem, Litowich Law provides dedicated counsel and experienced representation for estate planning matters throughout Oregon. We welcome you to contact us for a consultation.Categories: Estate Planning