Leave Nothing to Chance: Three Things Every Parent Needs to Know About Estate Planning
When you were pregnant, you meticulously watched your diet and researched the safety ratings of all the car seats. When your baby was born, you bought BPA-free bottles and toys. And unlike your parents in the 80s and 90s, you put a helmet on your kid when they learned how to ride a scooter or bike.
When it comes to your child, you leave nothing to chance.
Except—if you don’t have an estate plan—you are leaving A LOT to chance. If you are a parent of a minor child, there are three things you need to consider today:
Guardianship
Guardianship is, hands down, the most important planning decision you can make for your minor child. If both parents die without having designated a permanent guardian, a judge who has never met your child will decide who will be responsible to take care of them until they reach 18, the age of majority. This is not an easy thing to think about. Only you—as the adults who know your child best—should make this determination.
Often, parents tell me they can’t agree or are conflicted about who to choose as a guardian, so they ponder it every once in a while, fail to come to a satisfying conclusion, and give up. A thoughtful estate planner will listen to your deliberations and give you helpful guidance regarding the factors to consider when making this critical decision. I have found, in my own practice, that parents are often able to arrive at a decision they feel comfortable with after talking through the issues with me.
2. Money
As a parent of young children, you may feel that estate planning is less of a priority because you have more debt than assets. If that is the case, a smart financial plan can ensure that you have enough life insurance to cover your debts and take care of your family, should you pass away unexpectedly. In addition to life insurance, you may have retirement savings that will go to your child. Finally, if the circumstances of your death include the wrongdoing of others (like a car accident) your child may receive a significant settlement or money judgment.
If both parents die without a will, a judge will appoint a conservator to handle any assets your child inherits or receives. Often, judges will appoint the same person as both guardian and conservator. When your child turns 18, they will receive what is left of their inheritance, free and clear.
There are some potential problems that can arise in this scenario. Sometimes a family member may volunteer to be a conservator with less than altruistic intentions. Sometimes family members cannot agree who should be appointed, causing disharmony and strife for everyone involved, but especially for your child. In addition, you may feel (rightly, by common sense and neuroscience) that your child will not be ready to be responsible for a potentially-large sum of money when they turn 18.
3. Emergencies
Any estate plan for minor children should include an Emergency Guardian Power of Attorney and Designation of Patient Advocate. This is because, for many families, the person designated as the child’s permanent guardian may live out of state, be on a business trip, or otherwise delayed and unable to reach your child quickly in an emergency. Depending on how the emergency unfolds, your child may temporarily become a ward of the state until a judge can appoint your permanent guardian. I don’t need to go into the reasons why placing a shocked child into the care of strangers—even very nice foster parent strangers—is not ideal.
Easily-accessible emergency documents can help to avoid this scenario. An Emergency Guardianship (in the form of a specialized power of attorney) will take effect should both parents be incapacitated, unable to be located, or dead. This document allows a person you trust, who lives nearby, to take physical custody of your child until either you can return or a permanent guardian can be appointed. A Designation of Patient Advocate will allow a person you trust (often the same person designated as emergency guardian) to take care of your child’s healthcare needs until you or the child’s permanent guardian can take over.
Copies of emergency documents should be in the glove compartment of each vehicle your family uses, in the possession of the people you’ve designated as emergency guardian/patient advocate, at your child’s school front office, and somewhere easily-accessible in your house, like stuck on the refrigerator door. These documents should be in an envelope clearly marked “In Case of Emergency” and should include the current contact information of your emergency designees and back-ups, as well as instructions on where to find the original documents. Finally, Wallet Cards, like those available from Docubank, provide an easy way for first responders to access these documents when it matters most. A wallet card includes a log-in that provides access to emergency documents as well as a list of emergency contacts and physicians, and information about your child’s health conditions, medications, and allergies. Docubank keeps a log of when the documents are accessed and by whom.
A Final Note About Risk
As an estate planner, I am, by definition, planning for the worst case scenario. Still, I don’t believe in fear-mongering. For young families, untimely death is a low-probability event, albeit with catastrophic consequences. So, we plan for it, but we don’t obsess over it. There is something I often hear parents say, however, that needs to be addressed. Many parents tell me they never thought of estate planning until they knew they would be flying together (usually on an anniversary trip), leaving their minor children behind. This is illogical, but we humans seem to be hard-wired to assess risk poorly. If you drive in a car with your spouse or co-parent, you are actually at higher risk of death than when you are flying together. I’ll leave it at that.
The Child Protection Plan
Treetown Law, PLLC has created a Child Protection Plan that includes the Emergency Guardian Power of Attorney and Designation of Patient Advocate documents, as well as two Wallet Cards per child. The Child Protection Plan is included in the cost of all of Treetown Law’s Flat-Fee Comprehensive Plans for families of minor children and is also available as a standalone service. If you are a parent of minor children in Michigan or Illinois, don’t wait. Contact us and put these critical documents in place today.
