Happy New Year

I hope the new year is treating you well.  I am back in town after some time in Florida with my family.  Blog post to follow soon.  In the meantime, here is a picture of my children.

Kids Do Not Have to Be Treated Equally

There are good reasons for not treating children equally in a will.  Among them are :

1.   A child may be wealthier than his siblings

2.   A child may be a poor money manager

3.  A child may have a failed or poor marriage

4.  A child may have a disability

Generally, instead of disinheriting a child, or leaving one less money, a client can incorporate a trust into her estate planning.  A trust can hold money for the child who can not manage money, who faces an ex-spouse, or who has a disability and can not own money if she were to qualify for government assistance.  Similarly, a generation skipping trust can own funds for a wealthy child so the child is not taxed on the inherited funds at his death. 

Trusts are like beer, chocolate, and coffee in that there is not anything they can not do.    

Planning for College Age Children

This post is a month late.  Before kids departed for college, parents should have had their children execute a simple set of health care directives so that parents can receive medical information about, and make medical decisions for, their college age children.  This is especially important for children from divorced families where it is unclear which parent is the decision maker.  

The recommended documents are a health care power of attorney (to make the medical decisions) and a HIPAA disclosure so a parent can receive information about their child's health status after a bad Ecstasy trip or injury while car surfing.       

Beneficiary Designations and Asset Titling

The best estate plan will not work if beneficiary designations and asset titling are not coordinated with the provisions of the will and trust. Common mistakes include adding a child's name to a house deed, adding one child as the transfer on death beneficiary of a financial account to the exclusion of the other children, or not avoiding the probate process by transferring the asset to a trust or adding a transfer on death designation.

I always provide my clients with a list of how to address beneficiary designations and asset titling issues. If the issues are not handled properly, one child can inadvertently inherit most of the estate to the chagrin, and lasting contempt and hostility, of the other children.