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Hi, it’s Andy Stautz at Stautz Law. I’m back today with another estate planning talk on estate planning for children. Not you know, for children, they can’t do estate planning, but for your children, estate planning around children.
And this is in some way a follow up to [my other video talks] “when to revise your estate plan” and “estate planning for young adults” because you know, usually having your first child or having your, you know, successive children is something that’s happening to you, it’s a big life event, you know, as a young adult. And it has estate planning consequences.
So Step 1 is: Your children are very important heirs in the eyes of the law. So even if you’re… well… “Even if you’re married”… if you are married, and you have children, you might want every – all your property to go to your spouse, but actually your children are entitled to half of it!
That’s convenient when you are older and your children are adults, but it is very inconvenient when you have minor children. So when you’ve got a baby. If something happens to you the very next day. You know, half of your property is not going to your spouse. It’s going to your newborn. And then you’ve got 18 years of property guardianship to deal with. Which is tedious, not to mention expensive.
So. The best plan is at at the very, very least have a will to override that intestate share. Right, to make sure that your property goes just to adults and not to minor children.
Better still is to have a revocable trust with your spouse, if you have one. You know, joint trusts. Or on your own if not. Because that gives you way more control over how your property passes to your minor children. Or major children. What a revocable trust can do is stage an inheritance over time. It can limit or condition an inheritance on certain life events. Umm. It can keep your children from having to have a guardian in a probate proceeding. All of which are good things for most people.
You know, you might have special concerns, but in general it’s useful to most parents to say, OK well, you know, discretionary distributions for college expenses, you know, lump sum at age 25 or half at 25, half at 30, because what you don’t want to do is have minor children responsible for large sums of money, responsible for property when they can’t legally take action about it, and also you probably want to avoid the situation where your child turns 18 and all of a sudden they come into a big inheritance.
Because while generational wealth is usually great, it can also ruin lives if it’s given at the wrong time and under the wrong conditions.
So just to recap, you know, the possible variations of your your family situation and your children are basically endless. But the two big takeaways are: 1) have some plan in place because the 50% intestate share is really inconvenient. 2) Your plan should probably include a trust if you want to do anything more complicated than just dump money on your children at 18.
So that’s the long and short of it. Look at it as a childcare expense. You know, it costs money up front, but it’s a prudent decision to guard against all the crazy things that can happen if you don’t.
So again, a topic that requires personal planning, but that gives you kind of an idea of of what to look at. You can book a planning meeting with me online. You can give me a call.
Congratulations. If you just had kids, that’s great. Look forward to talking to you soon. Thanks and bye.
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