Whether you are a parent of a minor child or an adult dependent counts on you for support, you need to proactively plan for their future. Estate planning for dependents consists of more than just creating a will. You must plan for your death as well as your disability. Becoming disabled could mean that you can no longer be the provider for your dependents, unless you plan ahead.
Asset Distribution
The first step is to create a will or living trust that outlines how you want your assets distributed upon your death. Depending on the types of assets and the amounts, a lot of factors weigh into how these items get distributed. Minors cannot inherit outright. The assets must either be placed into a trust and managed by a trustee for the benefit of the minor beneficiaries or an appropriate guardian is appointed to manage assets. There are many ways to structure these types of trusts with terms that require age limits to access funds, distribution schedules and even insisting on certain conditions to qualify to receive funds. The possibilities on how to structure these trusts are limitless.
Name a Future Guardian
The will or trust should also name a legal guardian to take over for your dependents. This should be someone you trust who is capable of taking care of the specific needs of the person you are entrusting to his or her care. There are two roles to consider here. The first is that a person needs to be appointed as a personal legal guardian to provide continuing care and support for your dependent. The second, and this can be the same person, is to appoint someone to manage the assets that will provide financially for your dependents.
By proactively making these arrangements for your dependents, you remain in control of your choices and can select guardians who know, love and who will properly care for your dependents. You can also use these tools to provide funds for in-home care, support services or residential facilities. You can earmark funds to be used for travel, medical or educational needs.
Special Needs Trust
The next step is to determine whether you need to create a special needs trust. For an adult dependent or special needs minor that receives government benefits those benefits could be impacted by an outright inheritance. A special needs trust allows you to move assets into the trust for the benefit of the disabled person without creating issues around their government benefits.
Incapacity Planning
Next, you need to plan for incapacity. Having a durable power of attorney in place naming an agent to handle your legal and financial affairs will ensure that someone you trust can step into your place should you know longer be able to manage your own affairs.
Business Succession Planning
Business owners need a business succession plan to ensure the business continues to run smoothly and provide income for loved ones after the owner’s death or incapacity. The business succession plan should complement the personal estate plan. The two main goals of a succession plan are to create a lasting legacy while ensuring sufficient future income for loved ones.
For more information on creating a custom estate plan designed to protect your dependents that is carefully tailored to your preferences and needs, contact the estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/3467512646181485324
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