Estate Planning: The Best Christmas Gift For Your Kids
I often tell clients that they should get an estate plan done and wrap it up and put it under the Christmas tree. Those clients who have experienced a nasty probate understand what I mean. Those who haven’t feel like it’s a pretty lame gift to get their kids. Even if you haven’t experienced a nasty probate, you should know that having an estate plan protects your kids in so many ways. Here are some of the most important ways a good plan helps the kiddos:
1. Avoids Power Struggles. If you don’t designate an executor in a Will, state law directs who will be the executor (i.e., the person who will take care of business after you have died). If you have more than one adult child, this puts the decision on your children to decide who should be the executor. Alternatively (and inconveniently), multiple children will be required to act together, which is typically not advisable in this context.
(Pro tip: sometimes a kid is not the best option for executor. Sometimes families want to keep their kids out of their probate because it might affect the kids’ relationships or because their kids – while awesome at a lot of things – do not have the skill set required to handle a probate. In this case, you can appoint a close family friend, sibling, or professional to be executor.)
2. Avoids Fights. Not only does a Will clarify where your estate is going, you can also make a list separate from your Will that directs certain items of personal property to go to certain people. This is particularly important for items with high sentimental value, even if they don’t have any monetary value. For example: mom’s Christmas frog that always sat on the mantel or dad’s Hawaiian shirt that he got in Maui during Sally’s wedding. Kids want sentimental stuff. Help them avoid awkward conversations (that can quickly turn negative) by outlining exactly what they get.
3. Avoids Confusion. A Will is the only way to state who should be the guardian of your minor child if both of parents die before the child turns 18. As such, anyone with younger children should have a Will in place to tell us who should be the guardian. If not clarified by mom & dad, the family is left to figure out what is best for the kiddo: Should he be moved to North Carolina to live with his Aunt Erica? Should she stay here in Washington to finish out high school? For the little kiddos out there, make sure to clarify where they’re going and with whom they will live!
4. Avoids Awful Decisions. One of the worst cases I’ve worked on is one where a close friend had to decide whether to continue giving her mother, who was in a coma, life-sustaining treatments even when the doctors said they would only prolong the process of her mother’s death. Ugh. Worst decision ever. We didn’t know what her mother wanted, so it was on my friend and her brother to decide, which is a nightmare for any parent or child. If their mother had signed a health care directive, we could have simply implemented what their mother wanted instead of guessing what she would have wanted.
5. Avoids Guardianship. A power of attorney is used to appoint a person to make decisions for you if you’re incapacitated, meaning you can’t manage your affairs anymore. When presented, the person appointed can simply step into your shoes and start making those decisions. If you don’t have a power of attorney, you have to start a guardianship, which is the legal process to appoint a decision-maker (guardian) for you. This is expensive and time-consuming but easy to avoid with a power of attorney.
While you might not think of an estate plan as a great Christmas gift, know this: your kids will certainly thank you for it later. (Don't tell them I told you to get this instead of the new iPhone.)