Protecting Your Most Important Asset
Summer is fast approaching. With school about to get out, people shift their focus away from conflict, and narrow in on their family and loved ones. The same shift occurs in the legal field as potential clients think less about litigation and more about the people who are most important to them. For that reason, I am focusing this article on protecting those most important assets in our lives, our loved ones.
When I ask people if they have an estate plan, most people ask me what an estate plan is. “Is that like a trust or a will?” Together with not knowing what exactly an estate plan is, most people I speak with do not think they need a plan until they are old and rich. Let me clarify what an estate plan is and who should really have an estate plan.
An estate plan consists of several documents which protect different parts of your overall estate. For example, most basic estate plans will include a trust, a pour-over will, a power of attorney, and a health care directive. Generally speaking, a trust will protect your property, a will protects your children, a power of attorney assists you, and a health care directive ensures your health care needs are cared for properly in the event you are unable to speak for yourself.
I think we can all agree that our most important assets are our children. If you have minor children, you need an estate plan. As mentioned above, a will provides for who and how your children will be cared for in the event both you and your spouse pass away. I understand that the thought is almost unthinkable, but imagine if the unthinkable occurs, and you have left no direction for who should care for your children and how they should be cared for?
A will can provide for who will take care of your children in the event you and your spouse are no longer around to do so. Your trust can create trusts with rules to ensure that any assets and insurance money you leave to provide financially for your children are used properly to meet your children’s needs. By creating an estate plan you can avoid placing your relatives or close friends in a position where they have to fight over your children. Your will gives the Court direction on how and who you wanted to care for your children, so that the Court, which knows little about your children or your relatives, is not forced to simply make a decision about the custody of your children. If, for example, you trust the care and upbringing to one relative who is really good with children, but would prefer your other relative who is a CPA to handle your children’s finances, you can do that. Your preference will be strongly considered by the Court in determining who cares for your children if you are no longer able. If you do not leave direction, then your relatives are left to petition the court and argue over who should be the caregiver of your children. Why would you ever allow someone else to decide who cares for your children?
So as we approach the summer season, consider creating an estate plan to ensure that your most important assets, your children, are protected in the event the unthinkable occurs.
About the Author: Ammon G. Nelson currently sits on the Board of the Weber Davis Estate Planning Council. He has created estate plans for people with a house and minor children, for people with multi-million dollar estates, and for people with estates somewhere in the middle. If you have questions about creating an estate plan for your family, you can call Ammon Nelson Law at 801-668-2490.