Family Focus - Part 2

In case you missed it, PART 1 (link)

Estate Planning Meeting

Bill, a construction company owner, and Susie, a stay-at-home mom, decide to meet with an attorney to discuss estate planning.  After learning a little bit about their family and their financial situation, their attorney advises them that they should both have Wills that dictate where their assets should go if one of them were to die. They learn that if they do not outline where they want their assets to go, the laws of their State will control, and the State's plan is not what they had in mind.  Bill and Susie decide they want the surviving spouse to have everything, and if neither of them were alive, they want everything to be shared equally between their two children, Little Billy and Annie.

In addition to outlining where they want their assets to go, they also learn that they can nominate a guardian or guardians to care for their children if the children are minors at Bill and Susie's death. This is an easy choice, as Susie's sister, Sally, has always been the go-to caregiver for the kids when the need arises.  

After some consideration and discussion, Bill and Susie decide that they do not want their children to have direct control over any inheritance until they are at least 25 years old.  They believe that, although they have no reason to doubt their children's money management skills, the kids will be more mature and able to handle a larger sum of money when they are a little older.  Their attorney tells them that they can create a Trust in their Wills for the benefit of the children.

Nominating a Trustee to handle any inheritance for their children until they attain the age of 25 is not as easy of a decision for Bill and Susie.  Although Sally would undoubtedly raise their children as if they are her own, Bill and Susie have some reservations about Sally's ability to tell the kids "No" as they get older. Bill has one brother, Buck, but Buck has struggled with drug addiction for several years and refuses to acknowledge the problem.  Not wanting to burden their aging parents with the task, they decide to nominate the Trust Office at the local bank for the job.  This provides them with the peace of mind that someone who knows what they are doing will safeguard any inheritance, when and if the time comes.  

Although the Wills now take care of what Bill and Susie want to happen after they are gone, they have never considered what will happen if they are still alive but unable to handle their own affairs. Their attorney recommends that they nominate Agents to handle both their property- and medical-related decisions.  He also recommends that they give some thought to whether or not they want to be kept alive by artificial means, and if they do not, who they wanted to make that decision.

Bill and Susie dated throughout High School and College, and decide that if the other was still alive and able, their spouse would certainly be the best person to handle any business and medical issues. Neither want to be kept alive by artificial means, and they have discussed this with each other in detail.  Susie is confident that, if Bill was not alive or able to be her Agent, her sister, Sally, would be more than capable of doing so.  Bill has a friend from college who is a CPA who has agreed to be his Agent for property-related issues if Susie is not able to do so.  Bill knows that, if the need arises, although he has his own problems, Buck will be able to step in and make medical decisions for him if Susie cannot.    

After ironing out these details, Bill and Susie ask their attorney for any other suggestions on what they could be doing to help their children get ahead.  They discuss beginning to save for college. Bill secretly hopes that Little Billy will someday get a full-ride scholarship to a D-1 football school, and he is blown away when he hears about the projected cost of higher education.  Bill and Susie also decide that they should purchase additional life insurance to make sure they can pay off all their debts if something were to happen to them.  Finally, they decide that opening savings accounts for the children is a good way to teach them about the importance of saving.

Next week, we will fast forward a few years and see how life has treated Bill, Susie, and the kids.  PART 3