Many young parents think estate planning is something they can worry about later, when the kids are grown, the mortgage is paid off, or they have accumulated more wealth. But an estate plan is not just for wealthy retirees. In fact, having a plan can be especially important when you have young children who depend on you.
An estate plan allows you to put your wishes in writing and establish protections for the people you love. It can help your family avoid unnecessary complications, provide guidance about your children’s future and potentially help reduce the time, expense and stress associated with probate.
For families throughout Cape Cod, Plymouth and Southeastern Massachusetts, McManus Estate Planning, LLC can help you create an estate plan based on your family’s unique needs and goals.
Estate Planning Is About More Than Money
When people hear the phrase “estate planning,” they often picture wealthy families dividing millions of dollars in assets.
The reality is very different.
Your estate includes the things you have accumulated throughout your life, whether that means a home, bank accounts, retirement savings, investments, life insurance or personal property. But estate planning is not simply about deciding who receives those assets.
For parents, it is also about answering important questions:
- Who would care for my children if something happened to me?
- Who would manage money for my children?
- How would my children receive an inheritance?
- Who would make financial decisions if I became incapacitated?
- What happens to my home and other property?
- How can I make things easier for my family during an already difficult time?
You may not have a complicated financial portfolio. You may simply have a home, some savings, retirement accounts and young children. That is still enough reason to need an estate plan.
Why Parents With Young Children Need an Estate Plan
One of the strongest reasons for parents to create an estate plan is that children cannot simply manage an inheritance on their own.
If both parents were to die while their children were minors, someone would need to take responsibility for their care. Someone would also need to manage whatever money or property the parents left behind. A properly designed estate plan can address both concerns.
Without proper planning, these decisions may fall to the court system or be handled under Massachusetts law rather than the parents’ wishes. For most parents, that risk isn’t worth taking.
A Will Is Important, But It May Not Be Enough
A Will is an important estate planning document, but parents should understand what a Will can, and cannot, accomplish.
A Will can communicate your wishes regarding the distribution of assets and may include your preferences concerning guardianship of minor children. However, a Will generally becomes part of the probate process after death.
For example, leaving assets directly to a child may result in the child receiving control of those assets at a relatively young age. Many parents would prefer to provide financial support while their children mature and develop greater financial responsibility.
This is one reason a trust can be an important part of an estate plan.
How a Trust Can Protect Your Children’s Inheritance
A properly drafted trust can provide parents with more control over how assets are managed and distributed to their children.
Instead of leaving property outright to a child, parents can establish a trust that holds the assets for the child’s benefit. A trustee can then manage those assets according to the instructions established in the trust agreement.
Depending on how the trust is structured, parents may establish provisions for education, healthcare, housing and other needs. They may also establish guidelines for when a child receives greater control over inherited assets.
For example, parents may decide that assets should remain in trust until a child reaches a certain age, such as 25 or 30, rather than giving the child complete control immediately upon reaching adulthood.
What Is Probate in Massachusetts?
Probate is the court-supervised process used to administer certain estates after someone dies.
For families, probate can involve paperwork, court procedures, creditor notifications, payment of valid debts and eventual distribution of assets. It can also take time and create additional administrative responsibilities for the people handling the estate.
A Will does not, by itself, eliminate probate. In fact, a Will generally directs how assets should be distributed through the probate process. For a grieving family, having to navigate a court-based process can add another layer of stress during an already emotional period.
One goal of estate planning is to structure assets and documents in a way that may reduce the assets subject to probate, depending on the circumstances.
The value of avoiding probate is not simply about saving money. It can also be about making the process of settling an estate easier and more private for the people left behind. A thoughtfully prepared estate plan can give your family clearer instructions and potentially reduce unnecessary administrative burdens.
Estate Planning Can Protect You While You Are Still Living
Estate planning is not only about what happens after you die. A comprehensive estate plan can also address what happens if you become incapacitated and cannot make decisions for yourself.
Parents may want documents that establish who can make financial or legal decisions on their behalf and who can help with important matters if they are unable to manage them personally.
This can be especially important for families with young children. If one parent becomes incapacitated, the other parent may suddenly have to manage everything from household finances to children’s needs. Having the appropriate documents in place can make that situation easier to navigate.
Your Estate Plan Can Change as Your Family Changes
Another reason not to put off estate planning is that your plan does not have to remain exactly the same forever. Families change.
You may have another child. Your children may grow older. You may purchase a new home, start a business, change jobs, experience a divorce or remarriage, or experience a significant change in your financial circumstances.
Fortunately, many estate planning documents and certain types of trusts can be amended or revoked when circumstances change, depending on how they are structured.
That means creating an estate plan today does not mean you are permanently locking your family into today’s decisions. Instead, you create a foundation you can update as your life evolves.
When Is the Right Time to Create an Estate Plan?
For parents, there is rarely a good reason to wait for the “perfect” time to begin estate planning.
If you have children, own a home, have retirement accounts, maintain life insurance or simply want to make your wishes known, you already have reasons to start thinking about an estate plan.
The goal is not to predict everything that could happen in the future. It is to make thoughtful decisions while you are healthy and able to make them.
It is much easier to make these choices around the kitchen table today than to leave your family trying to figure everything out during a crisis.
Estate Planning for Families in Cape Cod, Plymouth and Southeastern Massachusetts
Creating an estate plan is one of those tasks that may feel difficult to think about, but once it is done, many parents find comfort in knowing they have taken an important step to protect their family.
You do not have to be wealthy to benefit from estate planning. You simply need people you care about and a desire to make things easier for them. A thoughtful estate plan can address your wishes, protect your children, provide direction for your assets and potentially help your family avoid unnecessary probate complications.
Estate-planning Attorney Keith McManus and our team at McManus Estate Planning, LLC serve clients throughout Cape Cod, Plymouth and Southeastern Massachusetts, helping individuals and families develop personalized estate planning strategies based on their circumstances and goals.
Your children depend on you to plan for their everyday future. Estate planning is another way to care for them by making sure they are protected even when you cannot be there to do it yourself. Schedule your free initial phone call with Keith McManus to discuss beginning your estate plan to protect the ones you love.