The following is the baseline protection I think of when I hear someone mentioning that they are having a child for the first time, or having another child, and they are considering an estate plan.
This list will start out with what I consider the most probable protection needed, not the most crucial.
Power of Attorney for Care and Custody of Minor Children (“POA”): There are a number of different scenarios that the POA would cover. However, the POA does cover those last ditch efforts many of us have attempted before traveling without the kids. As such this is the most probable document needed. Generally speaking, the POA legally appoints someone to “act” as the parent (or more specifically, the agent of the parent) concerning his or her child. While traveling, most parents tend to be first concerned of health care for the kids, and also the potential death caused by travel. The first issue is solved with the POA, as the agent would have the authority to ensure your child’s health care is provided if needed. The POA won’t help in the scenario of death, as POAs lose authority upon death of the POA creator (called the principal).
Term Life Insurance: Why would someone list an insurance product before an estate planning tool? Because, I am making an assumption that the reader is part of a married couple, and all of the kids are apart of the current marriage. If not, please mentally switch Term Life Insurance with the Last Will and Testament. Disclaimer, tons of assumptions are being made here, so do not rely on this statement at all. The passing of one spouse, even if you have kids, legally can be a very simple process even if you do not have a Will. No matter the emotional toil taken, the legal side can happen with some ease. However, the economic impact of losing a spouse, especially a spouse that is the main, or sole, income earner, can be devastating. Term Life Insurance is an inexpensive way to lessen the emotional and financial burden that falls on families when one spouse passes away.
Last Will and Testament: When the last parent of minor children passes away, a Last Will and Testament is crucial for us Idaho residents. In Idaho, the only way to legally nominate a guardian for your minor children is through a validly created Last Will and Testament. It is that simple. Create a Will, name your guardian. Name your alternate guardian if your first guardian cannot or will not act as guardian. And, name your second alternate guardian if your first alternate guardian can’t act.
Minor Children’s Trust: There are two basic types of Trusts, a Testamentary Trust and a Revocable Trust. This writing won’t delve into the differences of these. Just know that either of these types can accomplish the same written goals. There are three basic ways to pass your assets on to your minor kids: 1) no planning at all and they will receive the assets at age 18; 2) simple will based planning and they will receive the assets as age 21; and 3) trust based planning and they will receive the assets when, how, and for whatever event you specify.
In whatever order is most important to you, if you have minor kids, you need a; 1) Will, 2) POA, and 3) Term Life Insurance policy. It is nice to not give an 18 year old or 21 year old all of your money, including life insurance proceeds. So, a trust is beneficial, if not needed in some situations.
If that “What-if” question has ever popped in your mind, you are having your first child, or a second child, and you want to answer those questions, please contact Jeppesen Law, PLLC to assist. 208-477-1785.