As I talk with more groups and individuals I find that many people still see an estate plan as only necessary for those with substantial wealth, those that reached an advanced age, and those with health problems. Nothing could really be further from the truth.
Consider Ann (not her real name) who was referred to me by her financial planner. She was recently divorced and had two children, 6 and 10 years of age. Her ex-husband had moved out of the region for his employment, and Ann had no family locally. Ann was 35 years old and worked in a middle management position. She had begun to build a nice balance in her 401(k) plan, and had life insurance through her employer as well as a $250,000 term life insurance policy that she owned individually. She owned her home but still had a $210,000 balance due on her mortgage. Ann indicated in our first meeting that she felt that a simple will would suffice, so that it was clear that whatever she left behind would be left for her children and wouldn’t be taken or controlled by her former husband. She had already changed beneficiary designations on her 401(k) and her life insurance so that those benefits were payable directly to her children.
As our conversation progressed Ann realized that her minor children could not hold title to property or accounts, and that in the event of her death a conservatorship as well as guardianship would have to be commenced for her children. Ann also realized that if she was incapacitated it would be important for her to have a power of attorney in place to allow someone to assist her with her financial affairs. Also, if she needed medical care she realized that having a healthcare agent appointed with an advance health care directive to help direct her care was going to be vital.
After some discussion, we settled on a plan that included a will with a trust for her children with her parents as trustees; appointment of a guardian if their father did not survive her; powers of attorney; and a health care directive. We helped Ann change the beneficiaries of her life insurance and 401k to the trust that she established in her will and provided for her home to pass to the trust in her will in the event of her death using a Transfer on Death Deed.
What holds true for Ann also holds true for married couples and all single parents. Proper estate planning need not be complicated or expensive. As with Ann’s plan, each estate plan needs to be designed for that client’s specific family and asset issues. Let us know if we can help with your estate plan or any other legal issues.
