Hello fellow parents! Joan Watters here, continuing to share with you the ten most common mistakes made regarding guardianship nominations in estate planning (if you missed 1-4, click here). The subject: What would happen to the kids if something happened to you? Let's examine the fifth mistake I have identified:
Mistake #5: not using a Trust to handle assets.
Many parents –particularly young ones who are still building their wealth- are under the impression that a simple Will is all they need to address their estate planning needs. A common misconception is that a Trust is an Estate Planning tool reserved for the very wealthy. But if you have minor children, a Revocable Living Trust is often a very good option. There are many reasons for this, but the main one is that when you put your assets into a Trust, your estate avoids probate. As you may know, probate is a long, expensive, and rather exhaustive, process over which the court presides. If something happens to you and your estate is subjected to probate, your loved ones and chosen guardian (have you chosen one?) are stuck dealing with this unpleasant process. And what’s more, the resources you have left behind will be tapped into by the probate process, and take far longer to be allocated to your guardian and children. With a Trust-based plan, your assets (including your family home) are available to your children and their guardian almost immediately.
Mistake #6: Biggie.
This sixth mistake I have identified is kind of a biggie. Many Estate Planning attorneys are accustomed to helping their clients name a guardian. But most of the time, no one thinks about excluding who you do NOT want to serve as a guardian for your children; no matter what happens.
Here is an excellent example of what can happen if you fail to take this sort of thing into account: a colleague of mine has two sisters. One is young, still in her twenties. She travels a lot, and hasn’t really settled down in her career yet. She is not married, is carefree, and likes to have a good time (parties!). On the other hand, my colleague’s other sister is in her early thirties, has a stable career, and has been married for a number of years with children of her own. Now, if guardianship were left up to the courts, the older sister might seem like the best choice. But it is my colleague (and not the courts) who knows that she would never want her older sister raising her kids. That is because she knows her older sister’s marriage and home life are frankly toxic, and they do not see eye-to-eye on parenting styles at all. Whereas even though on paper the younger sister looks unprepared for guardianship, my colleague knows without a doubt that she would rise to the challenge and commitment of guardianship, and devote her life entirely to my colleague’s children. They share the same values.
Again, these things seem simple and intuitive when I mention them, but I never stop being surprised at how many estate plans and guardianship nominations fail to address these essential concerns. Well, not on my watch. I am devoted to fixing this oversight. I “walk the walk.” Call me and I will work with you young parents to draft a protective guardianship nomination, for no cost or obligation, and I will also answer any and all of your questions about estate planning. I love what I do, and I enjoy empowering young parents with this information.
Click here to read about mistakes #7 and #8.