During such a busy and emotionally intense time Estate Planning probably will not be at the top of your priority list, but it should be, especially as these events occur.
One of the most important functions of an estate plan is to name a guardian for your children in your Last Will and Testament.
If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your children like you do, the person they choose may not be ideal.
A trust can give your spouse rights, but will authorize someone else, the trustee, the power to manage the property and protect it for the next generation.
If you have older children, a trust could, for example, provide for a younger child’s college education while helping their older sibling make the down payment on a house, and would prevent either form using their inheritance on a new Ferrari.
Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both.
Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.
As long as you were married at the time of death, your spouse will always be able to claim at least one-third of your probate assets. Even when it would contradict the terms of your will, Maryland law allows a spouse to claim one-third of the probate property if you have children, and up to half if not.
The same is true if you die without a will. In many cases where a spouse dies intestate, their partner can claim $15,000, plus half of whatever is remaining.
Financial and insurance institutions will not care what is going on in your life, they are bound by the contracts they have on file.
The outcome would be very similar in cases involving your health. Unless there are extenuating circumstances, i.e. a predeceased or unavailable spouse, it is often up to a court to make medical decisions should you become unable to do so.
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
Schedule a consultation to help you and your loved ones.