Here at the Law Offices of Alice A. Salvo in California, we help families, both new and established, devise estate plans that meet their current and future needs. We realize, however, that many people labor under the misconception that only wealthy people need estate plans. Nothing could be further from the truth.
As Kiplinger explains, if you and your spouse recently became new parents, your best interests require that you begin estate planning to protect both yourselves and your children. For instance, both of you need a will in which you designate the people you want to care for your children in the event of your untimely death.
Estate planning vehicles
It may surprise you to learn that a new parent estate plan can and should include more than a will or possibly a trust or two. Even if you choose to establish one or more trusts for the benefit of your children, you need to fund those trusts. Consequently, life insurance likely should constitute a large part of your estate plan. Whether you name your children as the beneficiaries of your and your spouse’s various life insurance policies ot name one of your trusts as the beneficiary, your life insurance proceeds may well represent the major, if not the only, way in which you can provide the funds necessary for your children’s care and maintenance after you die.
You may also wish to name your children or your children’s trust(s) as the person or entity to whom your bank accounts, other cash assets and vehicles become payable to or transfer to on your death. Such designations usually go by the names of “payable on death” or “transfer on death” designations.
Remember, in California and all other states, a minor cannot own assets in his or her own name. This is where establishing one or more trusts for the benefit of your children becomes a major factor in your estate plan. With a trust, your kids do not own the trust assets themselves. Rather, the trust owns them, and the trustee you designate manages those assets and distributes them for the benefit of your children.
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