Children

A gift to help with your New Year’s resolution

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If one of your New Year’s resolutions this year includes getting your financial and legal affairs in order should something unexpectedly happen to you, I have a gift I think you’ll enjoy.

To be specific, I just put the finishing touches on a free report I wrote entitled, “What You Don’t Know CAN Hurt Your Family: 5 Easy Ways to Make Sure Your Children, Wishes and Assets Stay Protected Should Something Happen to You”.

In this report you’ll learn 5 easy ways to get your legal and financial affairs in order, just in time for the New Year.  You won’t even need the help of an attorney for some of these important steps; simply follow my instructions in the guide and cross each item off of your “to-do” list as you go.

You’ll also discover:

  • How to legally name guardians for your minor children in a way that will hold up in a court of law
  • The difference between a will and a trust, and which tool you really need to make sure your family, wishes and assets stay protected upon your passing.
  • The details about simple document you can use to give someone legal permission to act on your behalf if you were incapacitated in an accident but did not die (…and without this document, no one will be able to help you under the current HIPPA laws!)
  • How to amass your “entire family wealth” and leave a true legacy to your children (hint: you don’t have to be wealthy and it’s easier than you think!)
  • And so much more!

To grab a copy of this report, simply visit http://bit.ly/gNUxIJ.

I’d also like to encourage you to forward this to any of your family or friends who really need to get their affairs in order just in time for the New Year.  I would especially encourage you to reach out to anyone who has minor children, owns their own home, cares for aging parents or is approaching retirement age themselves.

Again, you can get a copy of this free report now by going to http://bit.ly/dGpJM1. 

All my best,

Steve

The Distribution Of Your Inheritance CAN Hurt Your Kids, Reveals Marietta GA Probate Lawyer

By Steve Worrall, Cobb County GA probate lawyer

If you are reading this Atlanta area probate and estate planning blog right now, chances are you concerned about what would happen to your assets, investments and total inheritance when you die.  I am sure like most people, you want to leave an inheritance to your children in a way that’s safe, secure and free from the red-tape of probate.

Yet what most well-intentioned parents fail to understand is that it is the way their inheritance gets passed down to family members that can have detrimental and  life-altering consequences—which are far worse than having money tied up in the Georgia probate courts.

For that reason, I want to share some of my knowledge as an Georgia probate lawyer and give you a brief overview of the 4 ways your inheritance can be passed down to your children and how you can ultimately protect your inheritance from impulse spending, divorce, bankruptcy or poor decision making with proper education and a bit of planning:

  1. Outright Distribution:  An outright distribution is just that, mom and dad die and the children receive their inheritance outright, in one lump sum.  Simple, clean, but dangerous.  Statistics show that an inheritance will be gone within 18 months of a child receiving it.  And it does not matter how old the child is or how much the inheritance.  If a child gets divorced or goes bankrupt, the inheritance could be lost. 
  2. Convenience Trust:  With this arrangement, the inheritance is distributed to a trust, but the child can withdraw the trust assets at any time and for any reason, just by requesting it.  There may be an independent trustee managing the trust, or the child may be their own trustee or co-trustee.  Since no one can force the child to withdraw the income and principal from the trust, the convenience trust offers some creditor protection, and perhaps a mental barrier to withdrawing the trust’s assets, but not much else.  This also can act as a separate property trust, so that the child's spouse cannot access the inheritance.
  3. Step-Distribution:  This method is a more commonly used way of leaving money to your heirs.  It’s also known as the “speed-bump” approach.  With this type of distribution, the inheritance flows into a trust, usually with an independent trustee, which is managed and controlled for the child.  At certain intervals in the child’s life, a portion of the trust’s principal is released in a lump sum to the child.  For example, one third of the principal is paid to the child at age 30, one third at 35 and the remainder at 40.  They still have access to income and principal for health, education and other guidelines you structure, but you can leave your children a powerful message with this type of trust – “don’t blow the inheritance!”  The idea is that if they blow it the first time, they may not get any future distributions.  This may act as an incentive to the child to manage their money well, but it still adds little asset protection, and once the principal is gone, it’s out of the bloodline and gone forever.
  4. Lifetime Trust:  This type of trust holds and manages the child’s inheritance for the life of the child.   An independent trustee is usually chosen to manage the trust and many times the child can serve as co-trustee.  Principal and income may be distributed according to various guidelines and incentives that the parent provides in the trust document.  These guidelines act as a spigot or faucet:  adhere to the guidelines and philosophies of the trust and assets will flow; get into trouble and the trustee can turn the spigot off.

Once the child dies, any remaining assets in the trust can pass to the child’s heirs or other individuals or entities.  The lifetime trust provides the most flexible vehicle for values-based legacy planning.  It also provides the greatest degree of asset protection, including protections against divorce, bankruptcy and lawsuits such as malpractice or personal injury.   This is by far the most popular choice of trust arrangements among my clients, as it provides the greatest amount of asset protection and guidance for beneficiaries throughout their lives.

So now that you have read the 4 most common ways to pass an inheritance on to family members, I encourage YOU today to get clear on how you would like your inheritance distributed when you die.  Do you understand the potential consequences of turning your inheritance over to a child not ready for the responsibility? Are you concerned that your money or assets may one day be lost in a messy divorce or bankruptcy proceeding?    Are you simply unsure of the best way to protect your money—and your children—when you die?

If so, I would like to extend the opportunity for you to schedule a Peace of Mind Planning Session ($750 value) at no-charge with our office.  Here a Marietta GA probate lawyer will help you work through such hard questions and ultimately create a rock-solid plan for distributing your assets in a way that aligns with your core values, but also meets your children’s long-term financial needs.

However, we only have 8 such Sessions available each month, so call (770-425-6060) to immediately schedule an appointment with Marietta GA probate lawyer, Steve Worrall before they are all gone!

 

Choosing a Guardian for Your Children

If you have children, you should choose a personal guardian — someone to raise them in the unlikely event you can’t.

If your children are young, you’ve probably thought about who would raise them if for some reason you and the other parent couldn’t. It’s not an easy thing to consider. But you can make some simple arrangements now that will allay some of your fears, knowing that in the extremely unlikely event you can’t raise your kids, they will be well cared for.

All you need to do is use your will to name the person you want to be the "personal guardian" of your children if one is ever needed. Then, if a court ever needs to step in and appoint a guardian, the judge will appoint the person you nominated in your will — unless it is not in the best interests of your children for some reason.

If you don’t name a guardian in your will, anyone who is interested can ask for the position. The judge then must decide, without the benefit of your opinion, who will do the best job of raising your kids.

Naming a Personal Guardian

You should name one personal guardian (and one alternate, in case your first choice can’t serve) for each of your children.

Legally, you may name more than one guardian, but it’s generally not a good idea because of the possibility that the co-guardians will later disagree. On the other hand, if you prefer that two people care for your child — for example, a stable couple who would act as co-parents — name both of them, so that they each have the legal power to make important decisions on behalf of your child.

Here are some factors to consider when choosing a personal guardian:

  • Is the prospective guardian old enough? (You must choose an adult — 18 years old in most states.)
  • Does the prospective guardian have a genuine concern for your children’s welfare?
  • Is the prospective guardian physically able to handle the job?
  • Does he or she have the time?
  • Does he or she have kids of an age close to that of your children?
  • Can you provide enough assets to raise the children? If not, can your prospective guardian afford to bring them up?
  • Does the prospective guardian share your moral beliefs?
  • Would your children have to move

If you’re having a hard time choosing someone, take some time to talk with the person you’re considering. One or more of your candidates may not be willing or able to accept the responsibility, or their feelings about acting as guardian may help you decide.

Choosing Different Guardians for Different Children

Most people want their children to stay together; if you do, name the same personal guardian for all of your kids.

You can, however, name different personal guardians for different children. Parents may do this, for example, if their children are not close in age and have strong attachments to different adults outside of the immediate family. For instance, one child may spend a lot of time with a grandparent while another child may be close to an aunt and uncle. Or, if you have children from different marriages, they may be close to different adults. In every situation, you want to choose the personal guardian you believe would be best able to care for each child.

Choosing a Different Person to Watch the Checkbook

Some parents name one person to be the children’s personal guardian and a different person to look after financial matters. Often this is because the person who would be the best surrogate parent would not be the best person to handle the money.

For example, you might feel that your brother-in-law would provide the most stable, loving home for your kids, but not have much faith in his abilities as a financial manager. Perhaps you have a close friend who cares about your kids and would be better at dealing with the economic aspects of bringing them up. Provided that your brother-in-law and your friend agree, you can name one as personal guardian and the other as custodian or trustee to manage your children’s inheritance.

If You and the Other Parent Can’t Agree

When you and your child’s other parent make your wills, you should name the same person as personal guardian. If you don’t agree on whom to name, there could be a court fight if both of you die while the child is still a minor. Faced with conflicting wishes, a judge would have to make a choice based on the evidence of what’s in the best interests of your child.

Again, talk with the people you’d each like to name. Candid discussions with your potential guardians may bring new information to light and help you reach an agreement.

Making Your Wishes Known to the Guardian

Most people have strong feelings about how they want their children to be raised. Your concerns may cover anything from religious teachings to what college you’d like a particular child to attend.

One option is to write a letter to the personal guardian, outlining thoughts and feelings about how the children should be raised. Try not to put in too much detail, though; it could cause your nominee much guilt and frustration later if unexpected circumstances thwart his or her attempts to carry out your plans to the letter.

The best guarantee of an upbringing you would approve of is simply to choose someone who knows you and your children well, and whom you trust to navigate life’s complexities on your children’s behalf.

If You Don’t Want the Other Parent to Raise Your Child

If one of a child’s parents dies, the other parent usually takes responsibility for raising the child. This is what most people want.

If you are separated or divorced, however, you may feel strongly that the child’s other parent shouldn’t have custody if something should happen to you. But a judge will grant custody to someone else only if the surviving parent:

  • has legally abandoned the child by not providing for or visiting the child for an extended period, or
  • is clearly unfit as a parent.

In most cases, it is difficult to prove that a parent is unfit, unless he or she has serious problems such as chronic drug or alcohol abuse, mental illness, or a history of child abuse.

If you honestly believe the other parent is incapable of caring for your children properly, or simply won’t assume the responsibility, you should write a letter explaining why, and attach it to your will. The judge may take it into account. Judges are always required to act in the child’s best interests. In choosing a guardian, a judge commonly considers a number of factors; you may want to address them if you write a letter explaining your choice for personal guardian. Here are the big ones:

  • the child’s preference, to the extent it can be ascertained
  • who will provide the greatest stability and continuity of care
  • who will best meet the child’s needs
  • the relationships between the child and the adults being considered for guardian, and
  • the moral fitness and conduct of the proposed guardians.

SOURCE: Nolo

Wills FAQ Part 4: Can I use my will to name a guardian to care for my young children and manage their property?

Yes. If both parents of a child die or become otherwise unable to care for a minor child, another adult — called a "personal guardian" — must step in. The personal guardian will be responsible for raising your children until they become legal adults. You and the child’s other parent can use your wills to nominate someone to fill this position. To avert conflicts, you should both name the same person. For more information, see Choosing a Guardian for Your Children.

You can choose that same guardian to manage property that you leave to your minor children or you can name someone different. You can name a "property guardian," a "custodian", or a "trustee" to manage the property:

  • Name a property guardian. You can simply name a property guardian to manage whatever property the child inherits, if there’s no other mechanism (a trust, for example) to handle it. The guardian will manage the property until the child reaches the age of 18.
  • Name a custodian under the Uniform Transfers to Minors Act (UTMA). In every state except South Carolina and Vermont, you can choose a custodian to manage property you are leaving to a child. The custodian will step in to manage the property until the child reaches the age specified by your state’s law — 18 in a few states, 21 in most, 25 in several others.
  • Set up a trust for each child. You can use your will to create a trust for any property the child inherits and to name a trustee to handle the trust property until the child reaches the age you specify.
  • Set up a "pot trust." If you have more than one child, you may want to set up just one trust for all of them. This arrangement is usually called a pot trust. You name a trustee to decide what each child needs and to spend money accordingly.

SOURCE: Nolo

Who gets custody of child if parent dies?

The ugly battle over custody over Anna Nicole Smith’s baby and her body will likely continue to make tabloid headlines for months. But it brings up an important question you may need to answer.

If parents of minor children die, who gets custody of their children? It may be left up to a probate judge if a parent doesn’t leave a will.

Writing a will can help avoid a court battle over property distribution or child custody after your death.

See Video report from WALB on this subject.

Danielle Morrow is a working mother of two young daughters, and while her other half is deployed in Iraq, she rests assured each day that they’ll be taken care of, should anything happen to her or her husband.

"We wanted to be able to have the say of who raised our children in the event that we were not around to raise them. So that we could put them in a home where they would be comfortable, and the person raising them would have the same outlooks on life and the beliefs that my husband and I share," said Danielle Morrow.

If the couple were to die unexpectedly, the Morrow’s wishes should be carried out by a probate court, because they recently worked with an attorney on a will that states how their property will be divided after death. Morrow’s will includes the name of a "testamentary guardian" or person she and her husband want to take custody of their daughters.

"They are my most prized possession so I want them to be taken care of," said Morrow.

Attorney Ralph Rodgers says everyone, even a person young and in perfect health should have a will legally signed and documented.

"You die without a will then the Georgia Statute of Descent and Distribution will determine how your property is disposed. So a will let’s you make that decision rather than the state of Georgia making it for you," said Attorney Ralph Rodgers.

Rodgers says without a will the probate court may also appoint a person to take custody when children are involved.

"That might not be the person that the deceased person would have chosen," said Ralph Rodgers.

But Danielle Morrow doesn’t even think about that. Since she named a guardian in her will, her daughters will go to the person she and her husband have chosen.

"It’s a tremendous peace of mind. You never know when it’s your time," said Morrow.

"In the event it does happen sooner rather than later, that my children are going to be taken care of means a lot."

A written will, legally documented, signed and notarized, provides legal protection in court after death, over money, property, and especially a person’s most prized possessions.

A will must be properly witnessed or notarized to be enforced in a probate court. That’s why attorneys suggest you find a lawyer you trust to help you.

Attorney Ralph Rodgers says if an unmarried woman with a child dies without a will, the paternal father can come forward and take custody of the child, but the child’s inheritance would remain in the child’s name.

SOURCE: WALB.com