Most of us put off getting these legal documents, because we hope that we won’t die suddenly, or we hope that we won’t have a serious accident or suffer a brain injury.
But planning now can make the future so much easier for your loved ones.
How long is too long for your children to be in foster care? One night? Would you want your hard earned money going to your husband’s new spouse after you die, instead of your children? If you are a mother of young children, securing your children’s future should be one of your primary concerns.
There are a few main legal documents that you should have:
The Will is so important for a number of reasons.
The first, is that you need to appoint guardians for your children. If something happens to you or your spouse – if you are both in a car accident together, and one dies and the other is in hospital for months recovering – you need to make sure you have appointed someone to look after your children.
You don’t want emergency responders taking your children into foster care. You also don’t want family members fighting over who looks after your children, or for them to end up with a family member that doesn’t have your same parenting values.
Secondly, you want to make sure that your loved ones are properly taken care of. If your spouse will be financially secure, then you should set aside some of your estate for your children directly. If you leave your entire estate to your spouse, then there’s always the risk that he will meet someone else and make a new Will with her. Your children may end up sharing or losing their inheritance to their new step mother.
There are many forms of trusts. You can set up a family trust whilst you’re alive, and use it for investments purposes or for running a business.
Trusts can be a great entity in which to grow your wealth, and your children can be beneficiaries of the trust, so everything you do increases your family’s ultimate wealth. Trusts can also be set up in your Will.
One way or another, you should have a trust for your children. Even if it is as simple as a minor’s trust in your Will that restricts them from receiving their inheritance until they are older than 18 years.
There are more complex trusts you can set up in your Will, such as the family discretionary testamentary trust (often just referred to as a testamentary trust), that can provide asset protection, tax advantages and income splitting opportunities throughout your child’s life and well into their adulthood.
- 8 mistakes parents make when choosing guardians
- Who’s who on your estate planning team
- It won’t happen to us…but what if it did?
3) Kid’s Protection Plan
This comes in many forms, and different solicitors do different parts or things to help protect your children. Some solicitors don’t do this work at all, so when you make enquiries to do your planning with a solicitor, make sure they will do this extra work for you.
The Kid’s Protection Plan that I do involves detailed instructions to the guardians you appoint, including what education is important, how you want your children disciplined, what extracurricular activities your want them to have the opportunity to try, important health information, and also your financial values.
My Plan also involves doing a recorded legacy interview, so your children will have a recording of you speaking to them about important things in your life. I also help prepare instructions for temporary guardians, in case of an emergency and provide you with In Case of Emergency cards for your purse. I an also help you to exclude someone from being a guardian, particularly if you are a single parent and you don’t want your ex-spouse to be the only guardian after you die.
4) Power of Attorney
Having a Power of Attorney is as important as having a Will, because you are more likely to be seriously injured that killed in the case of an accident.
You will need to appoint someone to be able to act in your place – to make financial and legal decisions, and also to make medical decisions for you if you can’t. If you are in hospital for months, relearning how to walk, or in a coma, someone needs to ensure that your children’s lives continue.
Routine is important for them, and you need someone to know their routine and know what’s important for them, so that they are not more distressed than they need to be.
5) Advanced Healthcare Directive
Finally, although these documents are not binding in some parts of Australia, you should have a record of how you wish to be medically treated, if you cannot communicate those decisions after an accident.
It is a hard decision for a family to let someone die, but if it is important to you to die with dignity, and not to prolong your family’s grief and pain, then you may want to leave instructions as to what medical procedures and treatment you do or don’t want in particular cases.
This document often sits well when you also have a Medical Power of Attorney, as your attorney can then rely on the instructions you have already given, and ensure that your wishes are followed.
Don’t put this valuable planning for your family off any more.