| The last thing families with
young children want to think about
is estate planning. However, if
there were ever a time that estate
planning was important, it is right
after a family has their first child.
For example, let’s assume Jon
and Jane have their first child, Junior.
Before Junior was born, if Jon or
Jane died without a will, a document
that controls property after a person
passes away, the surviving
spouse would get all the property.
This is the expected and probably
favorable result. However, after
Junior was born, if one of the
spouses passed away without a will,
the deceased spouse’s solely-owned
property would generally be split
between the surviving spouse and
the surviving child. Thus, without a
will, Jane and Junior, a newborn,
would share the property equally.
Initially this doesn’t seem to be a
problem. However, for instance, if
Jane wants to sell the home which
had been in Jon’s name, a guardian
would need to be appointed for
Junior. This process could end up
potentially costing thousands of
dollars.
Most importantly, young
parents should be aware of the
guardian-nominating provision. If
both parents were to unexpectedly
pass away, the guardian nominated
will be given preference over other
people. Thus, the time and cost it
takes to get a guardian appointed
would be shortened and lessened.
Proper estate planning includes
not only a will, but also
powers of attorney and living wills.
A power of attorney is a
document that appoints another
person (called the “agent”) to
make decisions for an individual
(called the “principal”). A living
will gives general directions to
treating physicians with respect to
death delaying treatment. Most
think that powers of attorney and
living wills are only needed by the
elderly. However, there are
countless situations where if young
families had a power of attorney,
their situation would have been
easier. For example, one need
not look much past the Terri
Schiavo situation several months
ago to see how a power of attorney
or living will would have
made her situation easier.
When a spouse acts as the
agent, the entire process is simplified
in that the well spouse
need not be appointed guardian.
In Illinois, there are two
types of powers of attorney—
property and health care. The
definitions are obvious, one gives
an agent the power to make decisions
for the principal regarding
property and finances. The other
gives an agent the power to make
health care decisions.
Careful attention and consideration
should be paid when
determining who the agent should
be. Of course, many young families
choose their spouse. However,
as time goes on, the documents
can always be redrafted to
appoint a child.
Estate planning is sometimes
called “preventative planning.”
Getting everything in order now
can spare thousands of dollars in
court costs and attorneys’ fees. |
Article Details
