the PARENT TRAP

choosing your “GUARDIAN ANGEL”

Choosing a guardian for your minor children is a difficult topic. We often hear that parents are relieved after signing an estate plan appointing a guardian for the children — one more thing off that ever-growing to-do list. Plus, it prevents families (cue crazy aunties and controlling grandmas) from fighting in court over this issue.

When choosing whom to appoint as guardian, you should consider the children’s ages, guardian’s age, and where the guardian lives. While grandparents love their grandchildren to bits, a 75 year old may not be best suited to take care of three kids under the age of five.

“PRICE” on the PRICELESS [or it’s “cheap insurance”]

SOyou are at a point in your life where you are busy parenting your young children while simultaneously helping your own aging parents. Of course you’re not planning on dying, but what would happen to your kids if you do? What will you have to do for mom or dad if they get dementia? You’ve heard there are legal documents that could help, but who has time? Here are some reasons to put estate planning on the priority list.

“TRUST FUND” baby

Many people think that a trust fund is only for the wealthy. That is not the case. A children's trust is created to hold assets for the benefit of children in the event both parents pass away.

For example, if both parents pass away, your estate can pass to your children in trust, generally in equal shares. The trust will pay for the expenses of the children (education, medical, housing, etc.). At certain ages chosen by the parents, the trustee will hand over a portion of assets to the children to manage on their own (hopefully without blowing it on a trip for 15 of their closest friends to Turks and Caicos). Despite the name, a children's trust is not just for minor children. Some trusts start turning assets over to the children at 18, but some not until much later, if ever — it depends on how the parents think the children can (or more importantly, cannot) handle finances.

It is important to consider life insurance for both parents of young children. Many couples will get life insurance on the breadwinner(s) but overlook a policy for the stay-at-home parent. The work done by a stay-at-home parent is priceless. He or she provides childcare from sunrise to sundown (sundown if you’re lucky), three or more meals a day (don't forget about the endless snacks), laundry, errands, etc. Imagine the cost to provide those services for your family should something happen to the stay-at-home parent.

reaching “ADULTHOOD”

Even after gaining adulthood, most children need a little help now and then, for example, with financial matters, enrolling in college, or with medical matters. After a child turns 18, you have no legal authority to take these actions unless they sign a financial power of attorney and health care directive.

“GOLDEN YEARS”

Simultaneously as we worry about our children, the next generation is getting older and needs our assistance in a different capacity. Elderly parents who haven’t executed a power of attorney, health care directive with living will, or done any estate planning are putting an unnecessary burden on their children.

A health care directive with living will removes the burden of making end-of-life care decisions from the family in an already difficult time. A financial power of attorney allows the family to continue to pay bills and manage bank accounts and other property when mom or dad no longer have capacity. These documents are crucial when mom or dad are entering assisted living or nursing home.

Paradoxically, when a person actually needs these legal documents (i.e., mom or dad no longer have capacity), it’s too late. A power of attorney, health care directive and will can only be signed if the person understands the document when it is signed. In the situation where an individual doesn’t have capacity to understand legal documents, seeking authority for financial or medical decisions will involve the court and thousands of dollars.

Being proactive now will save you time and money and, most importantly, reduce the stress on your family during an already difficult time.