Estate Planning for Your Younger Family: 5 Important Documents To Have In Place

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According to AARP alone in the United States, only 24% of 18-to-34-year-olds and only 27% of 25-to-54-year-olds have a Will

Estate planning is often thought of as something only older individuals do. This is a misconception that can have serious consequences for young families.

Having minor children, you should not wait to establish a proper estate plan. Everyone hopes to be around long enough to raise their child or children into adulthood, but sometimes life has other plans. 

The only way to ensure their security is with estate planning for young families developed with the assistance of an experienced attorney. In this blog post, we'll explore the 5 crucial steps young families should take, to ensure a secure future for all.

The consequences of failing to plan:

The arrival of a child is a turning point in parent's lives. A new chapter begins, and along with it comes several responsibilities. With new members in the family, planning for your assets becomes a necessity. We all know that life is unpredictable and no one knows what might come your way tomorrow, next week, or next year.

If you die without a will or an estate plan, your assets will likely go through the probate process, which can be costly and time-consuming. Florida law will decide how your assets are distributed, and the fees and expenses associated with probate will be deducted from your estate, reducing the amount that goes to your loved ones.

Additionally, suppose you and your spouse die simultaneously without naming a guardian for your children. In that case, the court will determine who will look after them, potentially causing further stress and uncertainty for your family.

So the question becomes who will look after your kids if something happens to you and how will your assets be distributed among your loved ones without any disputes?

In such cases, it's crucial to have a valid will or trust in place so that your family will be cared for. 

5 Essential Documents to have in place before setting up an estate plan for your younger family.

1. Drafting a Will

Drafting a will in florida is one of the most important aspects of wealth management and planning for young families.

A will is a legal document that outlines your wishes regarding the distribution of your assets and nominates the guardian of your children. You should indicate who you would prefer to raise your child or children in the event of your passing.

In Florida, you can nominate a guardian of minors in your Last Will & Testament. If there are two parents, each parent should have their wishes outlined in the Will and name the other parent as guardian. Each parent should also nominate a backup or successor guardian if the other parent cannot serve.

Your Last Will also allows you to name an executor or personal representative. A person is responsible for carrying out your wishes and ensuring your assets are distributed according to your instructions. Hiring a personal responsibility does not conclude the task. That individual must understand the roles and responsibilities of a personal representative so that he/she can execute your estate properly. 

Importance of Choosing Your Guardian Wisely

When creating a will, it is essential to designate a guardian for your minor children. This decision should not be taken lightly, as the guardian will be responsible for raising your children and making important decisions on their behalf.

If both parents pass away or become incapacitated, having a guardian in place ensures that your children will be cared for by someone you trust. With a designated guardian, the court will appoint someone well-informed of your preferences and your children's best interests. By including a guardian designation in your estate plan, you can have peace of mind knowing that your children will be in good hands.

2. Consider Establishing a Trust

In addition to a will, young families may benefit from establishing a revocable living trust. A trust allows you to set aside assets for your children's benefit to be managed by a trustee until they reach a certain age or milestone. You can dictate the terms of when your child or children are to get distributions from the trust.

The trust can provide that funds may be used to:

• Provide for the health, education, maintenance
• Support of the minor child or children until they reach a certain age.

Upon reaching a certain age or milestone, you can instruct your trustee to distribute a fixed portion of the assets in the trust to the child.

For example, you can instruct the trustee to distribute a portion, say half of your trust assets to your child when they turn 21 and then the remainder outright at 30. This ensures your children's inheritance is protected and managed responsibly, rather than being distributed to them outright when they turn 18. Creating a trust ensures that your assets are distributed according to your wishes and trust in Florida also avoids the probate process. However, to avoid probate in Florida, creating a trust is insufficient unless you properly fund a Florida Revocable Living Trust. 

Why a Revocable Living Trust is Important?

Without a comprehensive estate plan, the distribution of your assets will be determined by state laws. Thus, by creating a will or trust, you control how your assets will be distributed, ensure that your children receive an inheritance that aligns with your values and goals, and select the guardian to raise them in your absence.

Administration of a Trust in Florida can be useful for financial assets, real estate, and life insurance. You can specify how and when your children will receive their inheritance, providing them with financial security while also protecting their assets from irresponsible spending

3. Name a Personal Representative and Consider Powers of Attorney:

When creating your estate plan, it is important to name a personal representative, also known as an executor, someone responsible for administering your estate and carrying out the instructions in your will. Choose someone you trust with the necessary organizational and financial skills to handle the responsibilities. In addition to naming an executor, it is also crucial to consider powers of attorney.

•  A Durable Power Of Attorney:

A durable power of attorney allows you to appoint someone to make financial and legal decisions on your behalf. This person will have the authority to manage your finances, pay bills, and make important financial decisions on your behalf.

•  A Designation of Healthcare Surrogate:

Similarly, a designation of healthcare surrogate allows you to select someone to make medical decisions on your behalf if you are unable to do so.

•  A Living Will

A Living Will is an advanced directive in which you make your wishes known concerning the withholding or withdrawal of certain life-prolonging procedures under very limited, specific circumstances. This document can provide clarity for your family and medical professionals and also ensures that your healthcare decisions align with your values and beliefs.

4. Estate Planning Documents: A Quick Comparison

5. Special Considerations for Blended Families and Previous Relationships

Having a blended family or children from previous relationships, estate planning becomes even more crucial. Without a carefully designed estate plan, your assets may not be distributed according to your wishes, potentially leaving some of your children with no inheritance. By working with an estate planning attorney, you can address the unique challenges of estate planning for blended families and ensure that your assets are distributed in a way that aligns with your intentions.

As your family and financial situation evolve. Life events such as the birth of a child, marriage, divorce, or changes in circumstances may require adjustments to your plan. It's important to review and update your estate plan regularly. By staying proactive and keeping your estate plan up to date, you can ensure that it continues to reflect your wishes and provide for your family needs.

Make sure to revisit your will, trust, and beneficiary designations to ensure they accurately reflect your wishes. Consulting with a professional estate planning attorney can help ensure that your plan remains up-to-date and aligned with your goals.

Conclusion:

Regardless of your age or family dynamics, estate planning is a crucial step in protecting the future of your loved ones. By creating a comprehensive plan that includes guardianship designations, asset distribution, healthcare directives, and trusts, you can know that your children will be cared for and your assets will be distributed according to your wishes. Consult with an experienced estate planning attorney to ensure your plan is legally sound and tailored to your needs. Estate planning is an essential tool for young families to secure their family's future.