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Do I need a Will?
Many people mistakenly believe that only the wealthy need to worry about estate planing. While most of us do not need to plan for estate taxes, parents of young children should at least have wills prepared to provide for their children in the event something were to happen to both of them. Who Will Take Care of Your Children? Parents of minor children should have wills prepared to say who they wish to appoint as guardian(s) of their children if something should happen to both parents. The guardians will assume the responsibility of raising the children and helping meet their needs. Guardians are not automatically financially responsible for children however. That should be addressed through children’s trusts, discussed below. Living Trust or Will? Most married couples own their property (real and personal) in some form of survivorship. In other words, if one spouse dies the property automatically passes to the surviving spouse without the necessity of probate. Probate is a legal procedure in which a court settles claims and determines who gets non-survivorship property that was owned by the person who died. Some attorneys recommend establishing a Revocable Living Trust in order to avoid probate. Trusts are advantageous in some situations but often-times a will can suffice. Your attorney should be able to discuss with you the advantages and disadvantages of establishing a Trust instead of a will. Minor problems If you have minor children at home and you intend for those children to be the ultimate recipients of your estate, a will to provide for such children is appropriate. Preparing wills becomes even more important if your family consists of step-children or disabled children. In such situations if parents fail to have wills prepared their property may be divided in a manner contrary to their wishes, and in some cases the distribution may be detrimental to the well-being of the disabled children. Although minor children can own property, they cannot sell, exchange, mortgage, lease, or otherwise dispose of assets until they reach the age of majority - 18 years of age in Oregon. If parents of minor children die without a will in place (intestate), their property passes to the children by law. The laws of intestacy were essentially established to distribute a person’s property in a manner that seems the most fair. This would mean that if a couple had three children together their property would be divided in thirds and each child would receive an equal share, regardless of differing levels of need. Generally, some sort of protective arrangement must be established to preserve the property or money until the children attain the age of eighteen. This would ordinarily be a conservatorship or at the very least a custodial arrangement. With either of these options, once the minor reaches age eighteen, he or she will receive his or her entire share. Without a will there is no direction as to who will serve as the conservator or custodian. Furthermore, many eighteen-year-olds are not fiscally responsible enough to manage large sums of money or property. Trusts for Children A will can establish testamentary trusts to provide for children under a designated age. If you have minor children your wills should have a children’s trust that leaves the children’s shares of your estate to a responsible adult, to be held in trust until the children reach a certain age. This allows the flexibility to provide for assistance in your childrens’ education or purchasing a home and not distributing everything to the children when they turn eighteen. A typical children’s trust will distribute the assets to the children as they turn twenty-five or some other age that may be more appropriate for them to receive a large sum of money. The children’s trust may be funded with the parents’ assets as well as the proceeds of any life-insurance the parents may have had. Special Needs Trusts There are special considerations involved when parents have children that are disabled and recipients of public assistance. To qualify for public benefit programs based on financial need, such as Medicaid and Supplemental Security Income (SSI), a person cannot have resources or income in excess of the program’s standards. If the person receives resources or income in excess of the allowed amounts, he or she will not be eligible for benefits until the excess funds have been spent. If you have a child with special needs, you should consult your attorney about establishing a testamentary supplemental needs trust to provide for the child without disqualifying him or her from any needs-based programs. |
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Disclaimer: The information contained in pages found at www.broesderlaw.com are publications of Arant &
Broesder, LLC for general purposes only and should not be construed as legal advice or legal opinion on any
specific facts or circumstances. If you have specific legal questions, you are urged to consult your own
lawyer concerning your own situation.
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