5 Things You Need to Know before You Begin Your Estate Plan
Written by: Emily Rozwadowski
Many new parents know that they must have a will but feel overwhelmed with the process. Parents may not know where to begin or what information they must have to get started. To simplify this process, here are five key things you need to think about, and know, before you prepare your estate plan.
1. Who will be the guardian of your children? For parents, this may be the most important reason for establishing an estate plan. A will specifically states who will have guardianship of your children if you pass away when your children are under the age of 18. You should also choose a second person to be guardian in case your first choice is unable to fulfill this important role.
2. Who will be in charge of the money? The guardian chosen will have physical custody of your children and will be in charge of day-to-day decisions regarding childrearing. However, your will should also establish a children’s trust. This trust, set up within your will, does not take affect unless you pass away when your children are under a certain age. The will provides that your money will go into this trust for your children’s benefit, instead of going to your children outright. This allows an adult (who you name as trustee) to make financial decisions for your children. Trustees are generally given broad discretion to give your children funds for education and maintenance. Then, at a certain age, which you choose, the remaining trust funds are given to your child outright. The trust ensures that young adults are not irresponsible with their money. Trust funds are also protected from your children’s creditors, who cannot get this money.
3. Do you have any specific bequests? Do you have any heirlooms or jewelry that you would like to go to specific people? Do you only have sons and, therefore, want your great-grandmother’s ring to go to your niece? Your will could ensure that these wishes are fulfilled.
4. Who will be your executor? And, what is an executor? An executor is the person who winds up your affairs after death. Their duties include taking care of any property, paying bills and taxes, and ensuring that assets are transferred the way you directed in your will. Generally, your spouse is the first executor but it is important to name a second person in case your spouse is unable or unwilling to fulfill this role.
5. Who will be your agent? A complete estate plan should also include powers of attorney for health care and property. These forms allow you to name someone, an agent, who will make health care or property decisions on your behalf if you are incapable of doing so yourself. Similar to an executor, your spouse is usually your agent. But, it is important to name a second individual to take over if your spouse cannot make decisions for you.
For more information about establishing an estate plan, please call Emily Rozwadowski at 773-710-9588 or email her at Emily@law-sr.com. Additionally, Spencer & Rozwadowski, LLP and NPN are hosting a Will Clinic to provide estate plans for families in one easy appointment. The Will Clinic will be September 8, 2012 at Flourish Studios. For more information, please click here.Posted on August 07, 2012 at 8:25 PM