Rich or Old? You don't have to be "rich" or "old" to plan your estate! Young parents who have few assets need to plan their estates, as do older, more affluent people. What would happen if a young couple with small children (and few assets), perish in a "common accident?" Who would rear their children? Even if the parents make a will naming guardians for their children, how will the guardians (assuming they accept that role!) pay for the health costs, education and support of the deceased couple's children? Accepting the role of guardian means that you have the legal and moral responsibility to provide for your young wards, and if few assets were left for their care, you (as legal guardian) have to pay for it! Here's a simple solution:
Young parents first need to buy sufficient life insurance to insure proper financial care for their children. (If you're in your 20's or 30's, and in good health, you can buy $500,000 of 30-yr., level term insurance for $300 to $600 premium per year.) Next, set up a living trust with your spouse and children as beneficiaries, and specify in the terms of your trust how its assets will be used to care for your family. Then, make the trust the beneficiary of your insurance, which provides the trust the needed liquidity so that its terms can be properly carried out. Finally, name a responsible trustee (i.e., the "money manager") to manage the trust and execute a "pour-over" will naming the guardians who will rear your children. This simple plan allows young parents to financially (and affordably) provide for their family's care and to specify in detail how and by whom their funds will be used for that care.
What about the cost of the estate plan? Most simple estate plans (living trust, will, powers of attorney, etc.) can be established for as little as $500 (much less than what parents spend for recreation!). Please call us for details.