This year, my mother passed away. I’m forever thankful that she took the time to create a will and trust. My husband and I buried our heads in the sand for years and raised our kids without the legal documents to protect them.
Shortly after my mom’s death, we met with an attorney and finally lined up a will and trust for our family. I can’t tell you the collective sign of relief we both let out once the last piece of paper was signed.
Despite having our legal ducks in a row after my mother’s death, the process of distributing her estate was challenging. I can’t imagine how hard it would have been without the will and trust. Whenever I had to handle her accounts or shut off utilities, I had to fax or email proof that I was legally able to do so.
As parents, we like to think we will be around forever for our children. The reality is, we have to come up with a plan for the “what ifs.” Some of the questions we have to consider in the event we are unable to make choices as a parent or upon our death:
Who do you want your children to live with?
Where will your children live?
Who will handle your finances?
How do you want your finances handled for your children?
Who will make medical decisions if you are unable to?
Do you want to implement life-prolonging efforts if you are not responsive?
What will happen to your physical belongings?
Tony Abou Ezzi, an attorney from Chicago, advises parents to create an Estate Plan outlining every possible scenario involving your family. An Estate Plan consists of:
1. A Last Will and Testament
2. A Revocable Living Trust or Irrevocable Trust
3. Power of Attorney for Property
4. Power of Attorney for Health Care
5. A Living Will
What’s the difference between a will and a trust?
In simplistic terms, a will outlines your wishes for your children and belongings. It becomes activated upon your death and lists the beneficiaries who will receive your assets. With a will, you can choose who you want to execute your plan and you can choose a co-executor too. A Living Will outlines what you want to happen should you be unable to make decisions while you are still alive. A trust is a legal entity that covers property and financials in your name. A trustee is assigned to oversee the trust and all the items placed within the trust. A trust can be activated when you are alive. If you have a special needs child, you can also set up a Special Needs Trust to protect disability income for that child.
Choose an attorney who specializes in estate planning to make sure you cover all the areas of planning involving your children. Should both parents pass away without a will or trust, then state law kicks in. This often involves probate, a court proceeding in which a judge determines the outcome of your finances and your children.
Here’s another tip that will be extremely helpful to whoever executes your estate upon death: Keep all of your financial and sensitive information in a place they can access it. List all of your financial accounts, utilities, automatic payments, etc. This will make it much easier to manage the day-to-day activities and keep things running smoothly for your children.
And finally, once you have completed all of your documents, communicate your wishes with your loved ones and give your executor copies of your will and trust. Your attorney will retain copies as well. If you choose to place the original in a safe deposit box, be aware that it may be difficult to obtain access upon death.