If you first drafted your estate plan before you had children, you need to change your Wills and other estate planning documents after the birth or adoption of your children. Here is the list of questions I provide to my clients when they have a new child to help guide them through the changes that need to be made.
1. Who is the person you want to serve as guardian of your children in the event neither parent is available? If you are naming a couple, indicate whether one or both of them could serve alone.
2. Who is the person or person you would like to name as alternate guardian in the event the primary guardian is no longer able to serve?
3. Who are the primary and alternate people you would want handling any funds left to your minor children? (This person is called the “Trustee.”)
4. Think about at what ages you would like your child to receive an outright inheritance (assuming that funds they inherit before that age are being used for their education, medical care and other expenses.) Many people choose a staggered distribution of ages 20/25/30 or 25/30. You can choose the age or ages you prefer.
5. Does your child have any special needs that may require the use of public benefits at some point in their life?
In general, if you had wills, the attorney will draft new wills for each of you which nominate guardians for your children upon your deaths, provide for someone to manage any funds that are left to your children, and specify how those funds should be managed via a Testamentary Trust (a trust created in a will). The attorney should also draft an Emergency Guardianship Proxy which will nominate guardians for your child in the event of your incapacity or other unavailability (such as traveling without your child). You may also want to think about drafting a Living Trust at this point to manage funds during your lifetime and provide for the continued management and distribution after your death.
Not making these changes will leave the guardianship nomination unsettled, with the decision being made by a judge, not you. In addition, if you don’t specify an age for your children to inherit funds outright, they will have access to all funds at age 18. In addition, it is possible that a conservator would need to be appointed by the court to handle funds left to a minor child, if you don’t name a trustee to play that role.
A little planning and action on your part can save lots of time and money in the event of a crisis, and will help you sleep better at night (even if your new baby doesn’t.)
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