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INTRO: Parents typically have a keen ongoing focus on how they can best protect and enhance the lives of their children. Here’s an article about just that topic, concentrating on a few estate planning methods that are helpful in achieving this objective. Of course, the methods and strategies to which I refer are not exclusive to parents; they also apply well to grandparents and others who have minor and young adult loved ones they wish to help.
This article will explore some important ways we can provide security for our children and lay the groundwork for improving their lives.
It should go without saying that health is most important. As parents, we should do whatever is necessary to ensure that our children have health care insurance; that they see competent medical, dental, vision and other providers; and that we serve as their health care advocates when necessary or appropriate.
Likewise, it’s incumbent upon parents to provide a safe environment for their children at home and monitor their school and extracurricular activities. There’s no substitute for communicating with your children regularly to make sure they are not being bullied or unduly picked on; and that no peer, teacher, coach or other person with whom they are in contact is taking advantage or attempting to do so in any way.
Sure, the above is mostly common sense. But, if you have any minor children, having an up-to-date Will containing a guardianship provision is also common sense; yet many parents don’t have one.
Often, parents of young children fail to establish a Will because they cannot decide on a guardian. This is ironic because if parents die and have made no guardianship nomination, the court will appoint whomever the judge may deem appropriate, which guardian may be the very last person the deceased parents would ever have chosen or wanted. So, it’s infinitely better to struggle to nominate at least one guardian (if not also one or two alternates) than to leave this critical decision to chance.
Of course, another prudent way to protect your children is by protecting yourself. If you experience a disability that prevents you from working or limits your earning power significantly, do you have an appropriate disability policy to provide income replacement for you and your children? If you died prematurely, would enough assets be available to enable your children to maintain the lifestyle you want for them? If you’re not happy with the answers to these questions, you should obtain advice from an experienced life insurance professional.
Beyond basic protection and safety, a common way to enhance the life of a child is to save for his or her higher education – whether through traditional savings, permanent life insurance (which cash value can generally be withdrawn tax free), a tax-advantaged 529 plan or other methods. If grandparents or other relatives are in a position to make gifts to your children for their education, useful Federal Estate/Gift Tax rules may apply.
PART TWO: Rob explains more about Federal Estate/Gift Tax rules in Protecting and Enhancing the Lives of Your Children – Part Two.
This article is intended to provide information of a general nature, and should not be relied upon as legal, tax, financial and/or business advice. Readers should obtain and rely upon specific advice only from their own qualified professional advisors. This communication is not intended or written to be used, for the purpose of: i) avoiding penalties under the Internal Revenue Code; or ii) promoting, marketing, or recommending to another party any matters addressed herein.
Mr. Silverman is an attorney with R. Silverman Law Group, 1855 Olympic Blvd., Suite 125, Walnut Creek, CA 94596; (925) 705-4474; rsilverman@rsilvermanlaw.com.
TRUSTEE ADMINISTRATION: Need to find an experienced trustee administrator in Walnut Creek CA? Contact Robert Silverman at 925-705-4474 for legal advice on a Revocable Living Trust, “Summary” Estate Administration, Trust/Estate Beneficiary Representation and Will & Trust Disputes.