As you probably already heard, Elizabeth Edwards passed away this past Tuesday after a long battle with breast cancer. Her surviving children are 28, 12, and 10 years old. (Her son, Wade, who died in 1996, would be 31.)
1. I hope that Elizabeth has a KidsCare Plan.
When Elizabeth died, full custody automatically went to the children's father, John. I still hope that both Elizabeth and John have a KidsCare Plan, because if something happens to John, Elizabeth would have wanted to have a say in who would care for the kids. This is something that all parents need to discuss and get in place legally. It is a mistake to assume that you and the other parent are on the same page with respect to guardians, and it is a mistake to assume that your kids would go to the person you would choose, without any legal documentation in place.
A KidsCare Plan names long-term guardians who would care for your kids if you died or were incapacitated for more than a few days; names short-term guardians who would care for your kids immediately so that they would not have to experience foster care; eliminates specific people from being considered for guardianship; communicates the entire plan with everyone involved so that as soon as there is an emergency, everyone knows what to do; outlines your emergency plan for caregivers; and documents matters of importance that your guardians should know. My office is offering a free KidsCare Plan Packet this month for all parents in Oregon. Click here to receive your copy of the KidsCare Plan.
2. I hope that Elizabeth has protected her children's inheritance.
Although Elizabeth planned to file for divorce from her husband, she had not yet met North Carolina's "one-year separation before filing" requirement, and so when she died, she was still legally married. Without any planning in place (and with most plans that married couples set up), this would mean that all of her assets would go to her husband. There are a couple of problems with this arrangement.
The first problem is that an inheritance is not secured for the children. Sure, chances are that John Edwards will spend the next several years supporting the children through school and college, but if he remarries and does not set up an estate plan that protects the kids' inheritance, chances are that when he dies, everything will go to the new spouse. This is incredibly common. Children are disinherited all the time because of remarriage. Once John Edwards dies, the new spouse does not even have to be a wicked stepmother to disinherit the children. All she has to do is nothing, and the kids are automatically disinherited. (John still has time to plan to avoid this kind of situation, though.)
The second problem is that if there is not a plan in place, the combined estate of Elizabeth and John Edwards may lose out on estate tax saving opportunities that are available to the family right now. By leaving everything to John, Elizabeth's estate misses out on the 2010 year of no estate taxes and fails to plan for a possible retroactive tax on 2010, and everything will be taxed at John's death. (That's putting it simply. What you need to know is that anybody who will die with more than $1 million in assets, including life insurance and retirement accounts, needs to see an attorney to talk about estate and tax planning.) There may also be state estate and/or inheritance taxes that require planning. (Oregon has an inheritance tax.)
3. I hope that Elizabeth has found a way to pass on her values to her kids.
I read that Elizabeth, in anticipation of her death and inspired by the movie, Terms of Endearment, decided to write a letter to kids. I hope that she finished this letter, and I hope that the kids have a recording of her voice as well. There is nothing more precious that you can leave behind for your kids than your guidance and insight into who you are as a person.
All of our clients have the opportunity to record a message for their kids, where they can discuss their most important values and tell their kids how much they mean to them and what they would want for them. If a parent dies young, the recording serves as guidance, and if the parent lives a long life, the recording serves as a treasured window into a young parent's thoughts and dreams for their kids.
If Elizabeth has incorporated these 3 things into her plan, her kids will greatly benefit from that.
How about you? Have you incorporated these things into your plan? If you are ready to get started on creating a plan that will make things as easy as possible for your family, call my office at (503) 235-5150.
To your family's health & prosperity,
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