I’m sure you will agree with me that children go through so much when their parents end their marriage. In this situation, the least thing we can do is be there for them and make sure that despite the divorce, their future is secure in the same way that it was (if not more) while the marriage subsisted, prior to the split-up.
Here’s how the different estate planning tools can help!
A trust guarantees that your children’s inheritance is managed properly in case of any eventuality.
I have always called this a trusty estate planning tool, and for good reason! (Nope, not only because of how it’s called!)
If you can recall, a trust is an instrument that allows you to assign any dependable person whom you want to manage your assets for the benefit of your chosen beneficiaries, who, in this case, are your children. Particularly useful in the event that you are no longer able to manage your assets, a trust ensures that when this time comes, your hard-earned properties are safe in the hands of someone you have faith and confidence in.
Not the right time for your children to receive their inheritance yet? Have particular plans as to how particular properties are to be used? College fund, perhaps? With a trust (and your trusty trustee), all of these wouldn’t be a problem!
What happens if you don’t execute a trust, you ask?
Assuming that your children are still minors, the usual scenario is that the court takes over and assigns someone who it thinks is the next best person to take charge of your assets for the benefit of your children. This, more often than not, is the children’s other parent. Yup, your ex-spouse.
Now, don’t get me wrong—I’m not here to generalize against ex-spouses! Your ex-spouse can most definitely be the most trustworthy person despite the split-up, but the reality is that this is not always the case. With a trust, a divorcee is able to freely choose whom to entrust his or her assets with, especially if there is a better option than just leaving the choice up to the courts, which will most likely decide to just leave it with the former spouse.
A trust also allows your children to save money, time, and energy!
Yes yes and yes! A trust can actually do all THAT, too!
In a blog I posted a few months back, I took a deep dive on probate—what it is, how long it takes, and how much it usually costs. In substance, probate proceedings entail a lot, take a while, and usually cost much. They’re handled by specialized courts (probate courts), after all.
Another important information we must not leave out about probate cases: They’re entirely public, too. How much you own, how much is going to whom, who’s receiving what, and so on. All of this? Yes, all of this is publicized in a probate case.
If you don’t want your children to go through the inconveniences of probate proceedings, then, you guessed it—a trust is the way to go.
To recap, a trust allows you to determine who gets your property, how much each beneficiary will get, when they will get it, and such other terms you may want to put forward—without the courts supervising the process and publicizing matters relating to your estate that you can actually keep private.
Clearly, then, a prudently prepared and fully funded trust avoids, and frees your children from, the hassle that is all too common in probate cases.
Besides a trust, a power of attorney offers the same protection and convenience for your children, too.
Ah, yet another awesome estate planning tool! I have already done a thorough discussion about the power of attorney (Read it here!), but basically, it's an instrument where you get to designate an agent to handle your affairs in the event that you are no longer able to. Much like a trust, a power of attorney allows you to choose a trusted person, this time to act on your behalf with respect to any matter and for any cause and purpose.
How does this exactly benefit your children after a divorce?
Well, it’s pretty advantageous, actually! For one, your children need not second-guess their way out of the situation precisely because you have already made clear in the POA who’s going to be in charge and how and to what extent his or her taking on is going to be. No muss, no fuss, and no unnecessary expense on the part of your kids!
Of course, a POA may also contain some aspects relating to the guardianship of your children. Now, the topic of guardianship definitely needs a blog post of its own (It’s quite an extensive subject to say the least!), but just to touch upon the basics in support of my last point: With a comprehensive estate plan, you are able to assign someone to take care of matters such as education, care, and other important affairs of and for your children—surely the more sound option than leaving the decision up to a stranger (the courts, as a rule).
Whew! I didn’t expect this to go THIS long, but here we are! I have a few more things to say on this, to be completely honest. (Moms, I’m sure you understand all the feels when talking about our kids and their future, right?)
But yeah, let’s save those for another day!
I am more than open to continuing this privately, though! If you are currently in a situation where you might need some assistance in protecting your children’s future through estate planning, I’m here to listen and help.
Hit me up by clicking this link. You may also choose to sign up for a FREE virtual consultation here. I look forward to some more conversation with you!
Until then, talk to you guys again on the next one!