Why you should have an estate plan when you’re starting a family

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Who gets the boat?

Many people think of an estate plan as merely having a Will. Generally, it is those same people who assume that having any form of estate plan is only about deciding who gets what when they eventually die.

A Will is a good place to start, but it’s a part of the planning package, not the complete solution.

We think nothing of automatically arranging for car insurance or home and contents insurance, after all, it would be silly to not have such coverage. In doing so, we really don’t expect to need it, but it’s a sensible thing to do, right?

What if a young couple with dependent children were, tragically, both killed together? It’s such a shocking thought that we have difficulty even writing the words, but such devastating things do happen, fortunately, not too often.

In the event of such a tragedy, would that couple want the Family Court, albeit with the best intentions in the world, to decide who should care for and raise their children? Or would they prefer to have had a family plan to decide those arrangements themselves?

Such arrangements, or more precisely, lack of arrangements, can often lead to lengthy, costly, and emotionally heart-wrenching processes where well-intentioned grandparents, aunts and uncles argue about who is best suited for the task. 

Don’t put it off

It is imperative that couples who are planning on beginning a family take pro-active steps before the little ones arrive. Is choosing wallpaper for the nursery more of a priority than who will raise your children if you’re not around?

It is also extremely important to implement an estate plan ahead of time. Once baby arrives, life will become extremely busy with all the workload and tiredness that comes with a young family. Far better to sort things out beforehand, and it can all be fine-tuned and adjusted down the track should changed circumstances so demand.

More than just a Will

A Will is a fantastic instrument for indicating your specific desires, not only in terms of distributing financial assets, real estate and other items of value, either monetary or emotive, but also to indicate your very precise intentions as to who will act as guardian for your children.

Many considerations are necessary for this latter item, including:

  • Possible establishment of a trust to hold wealth until children reach a certain age
  • Choice of guardian(s) – their current health and circumstances
  • Whether the guardians should live in your current house for continuity of lifestyle and schooling
  • Whether the children have a good a relationship with the chosen guardian 
  • Whether the guardian should be financially catered for so that children have a particular lifestyle, including education, travel and extracurricular growth opportunities

It is possible that circumstances and relationships will change over time, and this will simply mean updating preferences as things develop.

The Will should be supplemented with the following vital documents:

  1. Financial Power of Attorney
  2. Healthcare Power of Attorney
  3. Living Will, or Advance Care Directive

It is important to realise that those appointed to the above roles do not have to be the same people as those appointed as guardians, in fact, it is often better if they’re not.

A Letter of Wishes can also be prepared, and while not legally binding, it will indicate your desires in more general areas of upbringing. Sound advice is vital in considering and preparing an estate plan. Estate planning … do it now, get it right. Contact us today for any questions about the topics raised in this blog, or any other legal questions you may have. 

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