When Mom and Dad age, if there is no estate plan, there’s no clear path of who will take care of them. Who is going to make medical decisions? Who has the authority to pay their bills? When there is no plan in place, the process will be more confusing, and it will take longer and cost more than if there had been an estate plan in place.
Problem with Putting Kids’ Names on Accounts
Clients often ask us, “If I have kids, can I just put one of them on the account and tell him or her to share it with the others?” Our answer is that you could, but that is a potentially dangerous estate plan. First, once you put someone on your accountant, that person becomes an owner with you, so all the life problems that person has can affect your account. For example, if you put your adult daughter on your account and she gets divorced, your account could be dragged into that divorce. Or if she’s in a car accident and gets sued and loses the lawsuit, that plaintiff could try to garnish her account. Even if those things don’t happen, if you put just one of your children on an account and tell him or her to share it with siblings, that child is not necessarily legally obligated to do that.
Family Divorce in Your Estate Plan
If you are concerned about one of your children getting a divorce, I call it “the in-laws becoming the outlaws.” But you can control the situation with a proper estate plan. There are provisions that enable you to control how your assets are set aside for your own bloodline.
Disability Benefits for Your Child
If one of your children or grandchildren becomes disabled, you can set up a provision in your estate plan that enables them to qualify for benefits that they are receiving or might receive in the future. You can set assets aside so that they do not count toward other types of expenses.
Managing Addiction in Your Estate Plan
This is a tough situation. If you have a child with an addiction to drugs, alcohol, gambling or something else, you can set up provisions in your estate plan to make sure that money is managed on their behalf. This can help ensure that the money doesn’t become a hindrance to them or encourage their addiction.
FundMax is an educational resource. Make no mistake, we are a thriving financial firm that makes money. We are a financial firm that takes new clients. But first and foremost, we consider ourselves a significant resource to the public. If you don’t feel like you have fully exploited us for all the knowledge and insights we offer, do some more research. We provide these insights through FundMax, a free retirement resource guide that helps people optimize their retirement funds and avoid regret by making sure they are “all set” for retirement. At FundMax, you can ask questions, watch videos and read some things. We encourage you to explore a lot of material on the site so you can get an idea of our style. You will likely get a lot of your questions answered. If you still want to talk to us; you’re welcome to contact us. We are happy to answer your questions.
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