Far too many people put off estate planning until it’s too late. People may tell themselves any number of excuses for avoiding this critical process, such as that their family is still growing and changing or that they don’t have enough assets yet to make the process worthwhile. In reality, if you have anyone dependent on you, either a spouse or children, if you have a retirement account or a home, you really need to create a last will and estate plan. After all, you can always review and update your will.
No one wants to think about the worst-case scenario, but what if you and your spouse die at the same time, due to an accident? That could leave your minor children or adult children with special needs in a very precarious position. The best thing you can do to protect those who depend on you and give yourself peace of mind is take the time to name someone as guardian or caregiver in your last will.
Don’t just pick someone you think is a good fit
There is a lot involved in accepting the role of caregiver or guardian. You shouldn’t just name a sibling, parent or friend who has a good relationship with your children. You need to very carefully consider how prospective candidates handle stress, deal with social and emotional issues, manage money and maintain their own households. Someone can be an incredible and caring person and still be a poor fit for the needs of your children.
Once you have picked a candidate, don’t just add his or her name to the document and move on. You absolutely need to discuss the issue with the person you name. He or she is not legally bound to accept that obligation, and if someone declines the position, your children could end up in foster care or a questionable situation. Make sure the person you select knows the responsibility involved and accepts it. You should also inform your children of the person you select and allow them a chance to respond and tell you their feelings on the matter.
Consider taking steps to financially protect minor children
No matter how much you trust or respect someone, you have to acknowledge that money can bring out the worst in people. A guardian for your children could decide that he or she should receive more compensation for the role than you allocated. That could result in waste or outright theft of the assets you set aside for your children when they reach adulthood.
Creating a trust that limits the use, withdrawal or sale of certain assets, such as bank account funds or the family home, can help ensure that those assets still exist when your children are older and need them. You should also factor in reasonable support and compensation for the person caring for your children when you plan.