Most people view estate planning as a process only involving elderly wealthy people. However, estate planning can have the same effect on younger couples as it does with older couples. Many younger couples either neglect or postpone any type of estate planning because they feel as though they haven’t accumulated enough wealth for a plan to be necessary. However, young married couples, especially those with children, should have a plan to help ensure that their loved ones are cared for in case of an emergency.
Who Will Provide Care For The Children?
In the event of the death of one parent, the surviving parent would normally remain the natural guardian of the children. But what would happen if neither parent survived an accident? An estate plan involving a simple will can solve this problem. One of a will’s most important benefits for a young couple is that it allows the couple to determine what person will serve as guardian for their children if both parents were to die. If there is no will naming a guardian, the court will appoint one based on state law and the children’s best interests. This court order may not be what the parents would have wanted.
How Will The Assets Be Distributed?
A will can also determine who will manage the estate’s assets for the deceased parents’ children. In the absence of a will, the court must appoint a conservator to handle assets left to the children. This person will be supervised by the court and all expenditures on the children’s behalf must be court approved. However, when the children turn 18, they might hit the “inheritance lottery” and recklessly spend their entire inheritance in a short period of time. To avoid court approval of asset distribution and to prevent the children from inheriting all the assets outright when they turn 18, a trust may be appropriate to prevent these problems. Grantors of a trust can determine how, when, how much, and for what purpose trust assets will be distributed throughout the life of the trust.
Who Will Receive The Assets?
Certain property with a named beneficiary, like life insurance or retirement plans, transfer automatically to the person with survivorship rights. This type of property is known as non-probate property, which also includes property held in joint tenancy, like a home owned by both spouses. All other property, known as probate property, passes according to the terms of an existing will, or at the court’s discretion if there is no will. Even if all of the property is non-probate property, couples should still have a will in case the spouse with survivorship rights does not survive. The failure to have a will, if the decedent is a Kentucky resident, will result in the surviving spouse only receiving half the assets, while the children receive the other half.
A young couple should not have to worry about what would happen in case of an unexpected accident. To have this peace of mind, they should make sure that their family and assets are protected in the event disaster should strike. Bill Hesch is a CPA, PFS (Personal Financial Specialist), and an attorney licensed in Ohio and Kentucky who helps clients with their financial planning. He also practices elder law planning, estate planning, and Medicaid planning in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky. Please contact him to establish a plan for you or a loved one to avoid these heartbreaking problems.