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How Do I Get My Kids Started on Their Estate Plan? Part Three

How Do I Get My Kids Started on Their Estate Plan? Part Three

Tip: Explain what happens if they don’t do the planning.

            It’s real simple. If your kids don’t prepare an estate plan, the State has one for them. They may not like it!

            If you die without a Will, it is called dying intestate, and if your assets don’t otherwise pass to your loved ones outside of probate (e.g. with a proper beneficiary designation), the laws of intestacy apply. We like to refer to the laws of intestacy as the State’s estate plan for you.

            In some States these laws result in consequences that are not at all what a person intended to happen. For example, in some States, if you don’t have children and you are married, the laws of intestacy provide that the deceased spouse’s parents will get a portion of the deceased spouse’s estate. Yikes! Try explaining that one to your spouse.

            Other times (again depending on State law), if you die without a will and the laws of intestacy apply, your spouse will be sharing assets with your children. Now before some of you go and think that something like that isn’t such a bad deal, this may result in guardianship (including court oversight of the estate of the minor), and what happens when a child is no longer a minor? How will the assets be spent when nobody is overseeing it for them and they can do whatever they want with the money?

            Additionally, if your children don’t have an estate plan and they have minor children, there is an even bigger problem. If something happens to the both of them, the kids will not automatically go to either the godparents or grandparents. It is ultimately going to be up to the court to make the decision at that point in time. I don’t know many people who would be okay with a complete stranger making this decision on their behalf. Simple planning can avoid this kind of problem.

            Bottom line…there are major problems that can arise if someone doesn’t have an estate plan which can be easily resolved with proper planning. Hopefully, you will be able to use some of this information to motivate your children or other loved ones to get started with their planning.

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