Estate planning is just as important for young couples as it is for those approaching retirement age. At Heritage Legal, PC, our legal team has extensive experience helping young couples engage in estate planning. Contact our Palm Springs law firm today to learn how we can help you create a meaningful estate plan.
Young Couples Should Choose Guardians for Their Minor Children
No young parent wants to think about passing away. The odds are that your child will not fall under the care of a guardian; however, should the situation arise, having a plan in place is incredibly helpful. For young couples who are parents to minor children, writing a guardianship provision is an essential part of the California estate planning process. As young parents, nobody can love your children as you do. However, taking the time to prepare for a potential guardian can help your children in the long run.
In most cases, if a young parent passes away, the surviving parent will receive custody. When both parents pass away at the same time, or when the surviving parent passes away, the court will appoint a guardian unless the parents have made special arrangements. Young parents have the right to name a guardian for their minor children in their Wills.
What happens when parents do not name a guardian for their minor children? Most young couples assume that the court will appoint a close family member to act as their minor children’s guardian. While California courts often select family members or close friends, they don’t always do so. The court could appoint a person who would not want to become the guardian. Adding a guardianship provision to your California Will that will allow you to decide who you’d like to become the guardians of your minor children.
Creating a Testamentary Trust for Your Kids As a Young Couple
The main estate planning goals of most young couples with children is to make sure that their children are taken care of after their deaths. Young couples want to leave their children with the fruits of their labor to give their children the best chance of becoming financially successful. One of the easiest ways to provide for your children is to name them as beneficiaries in your Will. Some young parents create testamentary trusts in conjunction with a Will.
A testamentary trust is a trust established through the terms of a Will. Testamentary trusts, or Will trusts, are irrevocable. When creating a Will, testators can include a provision that creates a trust and appoints a trustee to manage the assets of the trust on behalf of beneficiaries. Young couples usually designate the surviving spouse or their surviving minor children as beneficiaries.
The use of testamentary trusts works well for young couples with smaller estates. The benefits of creating a testamentary trust include saving your estate money on court costs, taxes, and fees. When young parents have a small estate, saving as much money as possible is key. The more money you save when it comes to estate taxes, the more money your minor children will obtain.
Creating a Living Trust for Minor Children
Some young couples choose to set up a living trust for their young children. Living trusts are different from testamentary trusts and offer various benefits. At Heritage Legal, PC, our legal team can help you determine whether creating a trust is beneficial under your circumstances. Young couples who create a living trust do so during their lifetime. Testamentary trusts are often more expensive to create and can involve significant maintenance.
However, if you own property outside of California, have an expansive estate, or want the power to manage the assets of the trust, a living trust may be favorable. Additionally, if you are concerned that someone will challenge your Will, a living trust might be the best option. Both testamentary trusts and living trusts can help young couples provide for their minor children after they are gone. At Heritage Legal, PC, our legal team can help you determine if a trust works with your comprehensive estate plan.
Setting Up College Funds for Your Kids and Retirement Funds
An essential part of estate planning for young couples often includes setting up a college savings fund. If you're a young couple, you are likely still developing your career. Many young couples are concerned that they don't have enough assets to begin saving for college funds. However, the best time to start college savings is as a young couple.
Young couples can set up a 529 plan. When setting up these accounts, parents can choose their children as the beneficiary. A 529 savings plan is similar to a 401(k) account when it comes to selecting investments. Parents place money into the 529 savings plan and then choose up to two dozen investment funds. Qualified 529 withdrawals are 100 percent tax-free, meaning that when your children withdraw funds to use for college tuition, the withdrawn money will not constitute income for tax purposes.
Contact Our Estate Planning Lawyers Today
If you’re a young couple who is interested in setting up an estate plan, the Heritage Legal, PC team can help. After reviewing your situation, we can advise you as to the best way to plan for the future. Contact our Palm Springs law firm today to schedule your initial consultation. |