New York Estate Planning & Elder Law Blog
Perhaps at the beginning of your marriage, you met with an estate planning attorney. If children have recently entered your life, however, it’s important to make sure that your estate plan contains various important details. This article reviews just some of the most key considerations that you must have if you plan on updating your child’s estate plan.
# 1 – Address Who Would Function as Guardian
It’s critical to make sure you consider who would take care of your children if they were still young when you and your partner passed away or become incapacitated. If you have not made these arrangements, you are leaving your child in a vulnerable position.
# 2 – Make Sure Children from Previous Relationships Are Considered
While you might have drafted estate planning documents in a previous relationship, you should make sure that your estate plan is adjusted to include all children who will be impacted by your estate. Many blended families who contain children from past relationships decide to create separate trusts to make sure that necessary funds reach children from previous relationships.
# 3 – Consider Creating a Special Needs Trust
If one or more of your children have a physical disability, a special needs trust can help to set aside money for the child’s future care without interference from the government. Special needs trusts are common among people who qualify for Medicaid or Supplemental Security Income. Trust language should specify that the trust is intended for care beyond what the government provides. In creating a special needs trust, a trustee is not able to provide assets directly to beneficiaries. Instead, trustees sometimes use funds to purchase various goods or services that improve a beneficiary’s quality of life.
# 4 – Naming Children Secondary Beneficiaries
If you and your partner pass away at the same time, you might want your child to be appointed as secondary beneficiaries. These designations place the children next in line between your primary beneficiary to receive assets. As you consider who to appoint as a beneficiary for various accounts, you should remember that children are not able to cash in on life insurance policies until they are eighteen.
# 5 – Appoint Someone with Financial Power of Attorney
As with living wills, durable financial powers of attorney might not initially seem to be directly tied to your children but can end up being impacted in unforeseen ways. If you become incapacitated, you should understand that it’s common to appoint several types of powers including paying taxes, managing your accounts, and transferring property to a previously created trust. Remember, a durable financial power of attorney relies on your assets to pay for daily expenses.
Speak with an Experienced Estate Planning Attorney
Your estate planning documents should reflect the various changes that occur in your life. Many people discover it’s a good idea to revise their estate planning documents every three to five years, particularly if there have been any substantial changes to their estate. If you need the assistance of an estate planning attorney, do not hesitate to contact Ettinger Law Firm today.