Estate planning is not a task that often comes to mind for those who are newlyweds or those parents who are in the midst of raising young children. Either you’re still enjoying the post-wedding excitement and promise of a new phase with a partner, or you’re living day-to-day with an infant or toddler who demands most, if not all, of your attention. But a plan for your estate, in the event you or your spouse passes away, is critical to ensure that your assets are dealt with efficiently. Above all, it will give you peace of mind that your partner and children will be well cared for in your absence.
Below are some options you should consider that are both cost-effective and well-suited for those with new spouses or young families.
Powers of Attorney
As an initial step you may want to designate a spouse, or other trusted family member, as your “agent” regarding your financial, legal, and health care matters. You have the option to grant that person with the ability to manage your finances as well as your healthcare decisions, if you were to become unable to make those decisions yourself (for example, an incapacitating illness). Additionally, there are ways to be specific about what your agent is permitted to do and not do on your behalf.
A Will
With a last will and testament, you can accomplish a few things. First and foremost, like the power of attorney, you will name who will manage your affairs upon your passing. You can also determine to whom your “tangible” property will go. Your tangible property is your household goods, vehicles in your name, etc. If you have children, your will also gives you the option of naming who will be their guardian in the event either you, or both you and your spouse, pass away. A will, however, still needs to go through probate, which may require additional legal costs and time. Probate is a public process to settle your estate, which includes passing of legal title of your property to your heirs specified in your will. If you do decide to draft a new will, it is important to understand that in Rhode Island a new marriage revokes a prior will, unless that prior will clearly states that it was made in contemplation of marriage.[i]
Another option is to distribute your property through your will to a separate trust, as a means to avoid probate and to ensure that any distributions to young children are held in trust until they reach adulthood.
A Trust
A trust is a great tool when considering your estate plan. Creating a trust will allow you to avoid probate when it comes to your assets, and any of your estate planning decisions within the trust will remain private. Couples often establish a joint revocable trust, where both partners serve as trustees with the power to administer the trust, but one or the other may set up an individual trust with the same effect. When a trust is “revocable”, you are provided the flexibility to adjust the terms of the trust during your life whenever you desire.
If you have assets you would like to leave to your children, you may leave those assets in your trust until they reach a certain age, as you wouldn’t likely want your minor children to be responsible for what could be assets of considerable value. Many clients choose to distribute those specific assets of the trust when their children reach 18 years old. However, it’s not uncommon to have distributions made at 21 years old and beyond.
If you’d like to discuss any of your estate planning needs, please contact Sasha Meyer at ameyer@apslaw.com.
[i] See R.I. Gen. Laws § 33-5-9.
About The Author
Alexander “Sasha” Meyer
Sasha is a member of the firm’s Business & Corporate Law Group. His practice focuses on assisting clients in various business,…
