The Phases of Motherhood: As Your Children Mature, So Should Your Estate Plan
Article published in Northampton Living
(May 2024)
EXPERT CONTRIBUTOR
Claire Crowley & Ben Palkowski
Estate Planning Attorneys
Old Colony Law
413 387 0080
oldcolonylaw.com
Mother’s Day is a time to celebrate mothers in all stages of their lives. From soon-to-be mothers to great-grandmothers, estate planning with asset protection in mind helps you support your children even after your death and helps ensure more assets are passed to the next generation.
Early Parenthood
You’re engaging in estate planning for the first time. Along with celebrations of newborns and new homes, protecting your most valuable asset – your family – becomes increasingly important. Our younger clients often refer to this as “adulting.” Of course, adulting isn’t easy and it’s often fraught with tough decisions and discussions of worst-case scenarios.
Accidents happen and pandemics happen and, should a worst-case scenario impact your family, the court could make a decision about who raises your child without your input and without your child’s input. Naming a trusted guardian for your children in your will is essential, especially when children are young. Without your direction, a court could appoint a distant relative or an unlikable in-law to raise your child, especially if that child is too young to voice an opinion to the court about where they want to live and who they want to live with.
In addition to naming guardians, parents with young children should consider setting up trusts that ensure children receive financial support in their early years, for funding everything from routine needs to medical care and tuition. Trusts provide the opportunity to ensure that your child’s inheritance is safeguarded and properly managed by a trustee until your child reaches a specific age or milestone. Without trusts designed to protect your child’s inheritance, young parents run the risk of simply hoping that a relative will “do the right thing” when it comes to your money and your children.
Empty Nesters
Fast forward 18 years and your children are now young adults – completing college, embarking on career paths, and getting married. At this stage in parenthood, it’s important to revisit your estate plan – the one you most likely created when your children were very young – to address concerns you may have about your child’s emotional and financial maturity, career path or spouse. Trusts can still be used to protect your 20-something child’s inheritance from careless spending at car dealerships or casinos. Additionally, asset protection trusts form a protective shield around your child’s inheritance, making the assets unavailable to a future divorcing spouse or creditors if their chosen career places them at a high risk for lawsuits, like medical providers or small business owners.
Grandparents
As your children continue to grow older, the assets you have worked hard to accumulate throughout your life are likely to grow in value. Many of our older clients, those with grandchildren, are concerned about the consequences of the estate tax, especially in Massachusetts. Updating estate plans in the golden years to implement estate tax minimization techniques can ensure more assets are passed to your children and grandchildren and help bolster a lasting legacy through charitable gifting.
More contributions from Old Colony Law
