One of my greatest passions as an Portland, Oregon estate planning lawyer is educating parents about how important it is to prepare for their untimely death. Not a fun topic I realize. But it just takes one sad circumstance of parents passing away and leaving the kids to deal with squabbling relatives to understand how critical this is for their well-being.
The possibility of leaving this world can be difficult to accept and many people choose to not think about it. Unfortunately, this fear often prevents people from taking the proper precautions they need to take.
I speak at various groups around Portland and usually deliver this message in an upbeat and cheerful way so people can see that preparing their estate plan for their family is a positive and joyful experience. But for today’s post I’m going to give you the real-deal about Portland, Oregon estate planning. Blunt, and to the point.
Essentially, it’s critical for everyone to understand the importance of estate planning for those we love – especially our children. As you can imagine, children are incredibly vulnerable if you die while they are still minors due to the simple fact that they are unable to take care of themselves.
Here are a few cold-hard facts about what could happen if you passed away suddenly without a will or trust in place.
1. A judge that doesn’t know you or your children will decide who raises them.
If something happens to you, who is going to step up? Is it the person that you want to raise your children? If you don’t have an estate plan in place, will your relatives squabble over who is or isn’t responsible for raising them? Do you really want to put your children through that?
2. The person who the judge picks to raise your kids will also be responsible for their financial well-being.
If something happens to you, all of your assets will be handed to the guardian (that you didn’t select) to be managed for them. The obvious fear is that this person could possibly use the funds for something other than the care of your children. However, there are many other things to consider. Does the person that the judge picked have the same financial values that you do? For example, you may feel strongly that you would like your children to attend high-end sports clinics to help develop their athletic skills. But, will the guardian see the value in this? What if they think spending money on what you would have wanted is a total waste? The potential for trouble is endless.
In addition to knowing who will be handling your estate, you probably have no idea of the true amount of money you'll be leaving behind to take care of your kids! Most families who own a home and have retirement and life insurance accounts will have to worry about paying estate taxes, and that rate will be 55%, starting in 2011. Additionally, without a plan in place, your estate could be subjected to thousands of dollars in probate fees. Without a plan in place, you just can't anticipate all of the costs and what those costs eventually leave with your children.
3. All of the money left from your estate (assuming there IS any) may go to your child in a lump sum when he is 18 years old.
Think about this one. What would you have done if you had been handed a bunch of money at that time in your life? Scary thought, huh? The hard truth is that most 18 year olds are simply not mature enough to properly handle finances at that level. I have heard story after story of kids who should have been fine financially, but weren’t because they decided to buy cars and clothes instead of investing in their future by going to college. So sad!
And if your child has special needs, you may be screwing him or her out of important government benefits if you don't plan properly. Then your child would have to use that inheritance to pay for insurance, medical bills, and every other expense until the funds are consumed. What happens after that?
So, there you have it - some cold, hard questions for you to ponder. My hope for those of you reading this is that you have already taken care of naming guardians for your children and put your estate plan in place and that you are keeping it up-to-date as the circumstances of your life change. But, if you are not, I would be happy to offer you a free Family Treasures Information Session to start you on the path.
Don’t worry if you aren’t sure who you would pick as guardian. I’ll help you with that.
Don’t worry if you think you can’t afford planning. I’ll work with you on that.
Don’t put this off because you don’t have the time. Think about how your kids will spend their time if something happens to you and you haven’t made these decisions for them.
Call our Portland, Oregon estate planning office today and make an appointment for a free Family Treasures Information Session and you’ll experience a peace of mind that you didn’t even realize you were lacking.
To your family's health & prosperity,