Mark W. Jordan Wills and Probate Law Blog on Lawyers.com

Estate Planning Article Series - Do You Want Your Children to Succeed?

Wednesday, April 14, 2010 by Mark W. Jordan

This is the ninth of a series of articles providing helpful information on estate planning. Please contact the estate planning professionals at The Drew Law Firm for more details on any of these topics or for any of your estate planning needs.

 0; Do You Want Your Children To Succeed?

Of course you do! However, after you have provided love, guidance, faith, food, clothing, shelter, medical attention, education, and the rest of the basics a good parent would provide, you should do more.

Q: Do you want your children to have a parent?

A: Yes, and you want it to be you. However, if a tragedy happens, you need to have a backup. It is crucial to have a Will that designates the first and second choice for a Guardian. Select a relative or a friend who knows each of your children and who can step into your role as the type of parent you want for your children.

Q: Do you want your children to have sufficient finances to cover the basics?

A: Yes. You start saving from the time you plan to have children. You put money into your savings, IRA, 401(k), home, business, etc. You need to have sufficient backup plans here also. If you lose your health, you want to have a quality health insurance plan. If you are unable to work, you need a disability plan. If you have an accident with your car you need car insurance. If your home burns down, you have a flood, or a burglar breaks into your home, etc, you need home owner’s insurance. Likewise you want liability protection for your home and business. Hopefully, you have planned ahead and have group life insurance and individual life insurance, for when you die. This may all be summed up in the simple phrase: “Have a backup plan, just in case.”

Q: Do you want your children to have a college education?

A: Yes. There are excellent public and private schools throughout the country, but they all require a significant amount of cash to cover tuition, books, fees, and room and board. If you save inside a 529 Plan, the earnings spent on qualified college expenses will be income tax free.

Q: Do you want your children to have everything in their control without working for it?

A: No. While a Will is the legal document to use for protecting your children with a Guardian, your Trust is the estate planning document for protecting your children from themselves. A Will gives everything to the children as soon as they turn the age of majority, which is 18 in almost all states, including Ohio and Kentucky. The Trust enables you to select a corporate or individual Trustee to administer the gradual distribution of your assets over a lengthy period of years, decades, or generations. You may even build in incentives such as rewards for good grades, a car for graduating in four years, or matching funds for the purchase of a home. The children get everything they “need”, but have to work for anything they “want”.

Q: Do you want your children to get too much?

A: No. To paraphrase Warren Buffet, you want your children to receive enough to do anything they want, but not enough so they can do nothing. Once you have reached the level of a sufficient amount to take care of your children, consider the possibilities of charitable contributions.

The next article will deal more specifically with taking care of your children through Family Business Succession Planning.

The early stages of estate planning are critical. If you would like to arrange an initial consultation, please contact our Cincinnati office. Our lawyers will work with you to define your goals, identify significant aspects of your unique situation, and explain your alternatives.

Our estate planning attorneys: Mark W. Jordan, Robert M. Smyth, George J. Zamary, James H. Coogan, Frederic L. Goeddel, Anthony G. Covatta, Michael D. McNeil, Nancy J. Frazier and Sybil B. Mullin.