By Steven J. Gibbs, Esq.
This month’s article springs from my personal experience because we have a newborn and this changes everything for estate planning. Changes resulting from new family members apply to parents and grandparents alike and this article focuses on the kinds of updates that are necessary when new family members arrive on the scene.
Key Estate Planning Documents Will Need To Be Updated To Protect A New Addition To the Family As Follows:
1. Guardianship Provisions concerning the care of children will need to be updated.
2. Wills and Trust Provisions concerning the distribution of assets will need to be updated.
3. Medical Planning updates concerning issues like “cord blood” are important and may be missed.
In a previous article, I wrote about how 3 major life events necessitate three basic estate-planning documents. That article did not address the major and most joyful life event of additional family members or more specifically…new children and grandchildren.
1. Guardianship Provisions Protect Children and Grandchildren.
So provisions for Guardianship are all about who will care for children/grandchildren in the event the current primary caretakers cannot continue to do so. In the most common case of parents, if one parent becomes unable, the other is the natural guardian. The importance of planning occurs when both parents cannot continue to care for children and a third party must be designated as guardian. The person or persons who are designated in most estate planning cases are often siblings of either parent or perhaps the grandparents depending upon age and ability to care for children. The most important estate planning guideline to consider is that the most stable and trustworthy candidates are chosen for the best interest of the children, and that the documents are abundantly clear concerning who the guardians are and perhaps who the successor guardians are. A properly drafted estate planning should also address what happens if the designated guardian becomes divorced or widowed due to unexpected life changes. For example, does the remaining individual continue to serve or does a successor sibling and spouse take over? Life changes concerning your appointees are another good reason to have regular estate planning update meetings as we’ve discussed in the past.
2. New Family Members Necessitate Changes to Distribution of Assets in Wills.
A well prepared Revocable Living Trust or Last Will & Testament should include some language to accommodate children or grandchildren who are born following the creation of the document. Usually your Revocable Living Trust or Last Will will say something like “children as defined by this document will include any children born hereafter…” Although estate planning documents may say something about after-born children, they may also say the opposite; so a “best practice tip” is to specifically update your Revocable Living Trust or Last Will so that it specifically mentions your new family member. Changes to your Revocable Living Trust or Last Will apply to the distribution of assets between children or grandchildren and also apply to any Guardianship designations in the documents as discussed above.
3. New Family Members May Necessitate Specific Medical Planning Concerns That Are Often Missed.
Science often moves more quickly than the law and the law is often slow to adapt. A big concern that can arise nowadays, based upon my own experience with clients, is estate planning for cord blood banking and related concerns. This is just one example and it is very important to address questions such as the rights to “cord blood” and “cord tissue” pass if the primary account holders (often the parents) are disabled or become incapacitated. For example, it is often advisable to transfer the cord blood rights to a revocable living trust so that upon disability or death, the successor trustee will have the authority to utilize this resource for benefit of whomever needs it.
The “take away” in all of this is to consider what updates are necessary when new little ones arrive on the scene in your family because they are too important to miss.
As always, I hope this was helpful, and
Until next time…
Steven J. Gibbs, Esq.
Steven Gibbs founded the Gibbs Law Office in January 2009, committed to providing client-centered legal services.
Steve as he would rather be called, is not your typical attorney. If you appreciate the staunch egotistical mannerism of most firms, you will be delighted with Steve’s unpretentious approach to educating and then assisting his client. Instead of giving you his complacent and lofty ideas, he would rather pursue your expectations with professional conversation about resolving your concerns under the Law. It’s your life and it’s his job to make your legal expectations come true while using years of his guidance and knowledge.
Steve was admitted to the Minnesota Bar in 1999, the Florida Bar in 2007 and was recently admitted to the California bar. Keeping abreast of law changes in these three States, as well as the United States, assists him in all aspects of the types of law the firm practices.
Along his career path, he was an associate attorney for an insurance defense law firm; an in-house real estate negotiator for Target Corporation; and corporate counsel for Civix, LLC and Vice President for North American Properties where he was responsible for various real estate transactions, including legal issues and negotiating unresolved business issues. Prior to opening Gibbs Law Office, PLLC, he was an associate with the firm of Roberts & Engvalson, P.A. where he gained his knowledge of trusts, estate planing and Wills. He opened his own firm in 2008 and now focuses on laws that will enrich the needs of his clients throughout their lives and those of their children. The firm has developed a practice dealing only with Trusts and Estate Planning, Wills, Medicaid Planning, Elder Law, Real Estate, Business Law and Probate.
Quoting from Steve “I decided to practice in areas that families will need as they progress down life’s path. To help them with a solid foundation that will carry them throughout there lives is a rewarding experience for me and my staff.”
www.gibbslawfl.com . firstname.lastname@example.org