There’s a saying about people who don’t have an estate plan created. They have a will, it’s just not the one that they want. Decisions are made by the state, and that includes who raises their kids.
If you’ve got young children under the age 18, says CNBC in a recent article, “You don’t have to be wealthy to put this estate plan into place,” you really need to make sure that you have a will. That’s where you can convey your wishes as to who should raise your children, in case tragedy hits and both you and your spouse are not able to.
If you die without a will, you won’t have the opportunity to designate the guardian you want to care for your minor children. Instead, a judge will decide this. It may be someone you really never considered for that essential responsibility.
That’s why a will is so critical for families with young children. You can also avoid or at least lessen conflicts between relatives by adding a guardianship clause in your will.
Without a will, the state’s intestacy laws will dictates how your cash and assets will be distributed when you die. Typically, the intestacy laws say that your estate will pass to your closest living relative—your spouse, your kids, your parents and your siblings.
These laws also stipulate how assets are divided among your family members. For example, in New York, your surviving spouse gets 50% of the balance, and your children get everything else.
But what if that's not what you want? Then you better have a will.
It’s also important to know that your will won't override your beneficiary designations for your retirement accounts and life insurance.
While you’re at it, a couple of other documents you'll need to get your basic estate plan together, are your financial power of attorney and medical directives. Power of attorney grants a person that you name to oversee your finances, if you're incapacitated. Medical directives allow you to state how you want to receive health care, if you’re unable to communicate your wishes.
An estate planning attorney can help you create the documents you need, to ensure that your children and you and your spouse are protected, before and after death. It’s an important part of your responsibility and will also provide you with peace of mind.
Reference: CNBC (August 8, 2018) “You don’t have to be wealthy to put this estate plan into place”