And…hello grandparents! I can guarantee that if your adult child saw this article, their eyes glazed over and they moved on. But that is ok. Young parents tend to believe that estate planning is for old people. So grandparents, next time you talk to your adult child, gently ask if they have started thinking about an estate plan. And, “hello” to all young parents that took a big gulp of coffee for that caffeine surge before diving into this article.

Life Insurance

Many young parents tend to think that they don’t need life insurance because they are young, healthy and are not going to die anytime soon. Yes, we hope that is true. But if the worst happens, will your children be ok? Can they live without your salary? Will your family be able to pay the rent or mortgage payments? Will there be enough money to hire a babysitter to help out?

Also, good news: if you buy a policy when you are young, it is significantly cheaper! We recommend a term life insurance policy. If you should die when your children are young, the proceeds of this life insurance policy will be transferred into a “trust” that will be managed by a “trustee” and can be used to care for your children and family.

Choosing a Guardian

Many young parents also don’t realize that an estate plan is used to appoint a guardian for your children if you pass away while your children are minors. This decision is possibly the most important estate planning decision you will make. If you already know exactly who want the guardian to be…great! Time to write it down and make it official and avoid a lengthy court process following your death. But for the rest of you, here are some things that you may want to think about:

a) Where does this potential guardian live? Will your children have to change schools, neighborhoods or states to go live with their guardian?

b) Does this potential guardian have the same religious, moral and general parenting beliefs as you?

c) Is this potential guardian interested in raising your children as his or her own if something happens to you?

Children’s Access to the Estate

If something happens to you and your significant other when your children are young, at what age do you want them to have access to your estate (i.e. savings accounts, retirement accounts, life insurance proceeds)? Some parents appoint a trustee to manage the estate until the children are well into adulthood. Other people distribute assets once the children have completed college or have a trade. There is no right answer, but this estate plan will help your family carry out your wishes when you are gone.

Creating an estate plan can be daunting. It is tough to think about death. There are lots of questions that must be answered to create a comprehensive estate plan. If these questions are left unanswered at your death, someone else will make the decisions and in many instances it will be the court system. This is completely unnecessary and not in the best interest of either you or your family.

An estate planning professional can make the process easy and you will have peace of mind knowing that your family’s affairs are in order.

If you would like to discuss establishing an estate plan for your family, I see people every day for a FREE 30 minute consultation in Walnut Creek and Brentwood.

This article provides only general legal information, and not specific legal advice. Information contained is not a substitute for a personal consultation with an attorney. LAW OFFICE OF JOAN M. GRIMES, PHONE (925) 939-1680 1600 S. Main Street, Suite 100, Walnut Creek, CA 94513 © 2015 Joan Grimes

A common issue in second marriages or where couples are not married is what will happen to the family home on the death of the first person. This is especially true if only one person is on title to the real property.

There are a couple of different ways to handle this issue. One option is for the surviving spouse or partner to have a right to occupy the property during the remainder of their lifetime. In this case, the surviving spouse or partner would not have any ownership interest in the real property and would not be on title to the real property. Usually, during the period of occupancy, title to the real property is held by the trustee of deceased person’s trust. The right to occupy is a personal right and therefore cannot be sold or transferred. The person with the right to occupy may or may not have responsibility for expenses related to the property. The right to occupy is also sometimes used to help adult children who need additional time to save money or resolve other issues.

A second option is for the surviving spouse or partner to have a life estate in the real property. Unlike a right to occupy, a life estate is a form of legal title to the property which the holder can sell. If the spouse or partner needs to move, they then have the “right” to sell their interest in the real property i.e. the value of remaining life to a third party. Depending on the relationship with the other beneficiaries, the couple may want the surviving spouse to have a life estate in order to avoid any dispute with remainder beneficiaries as to the rights of the surviving spouse.

Whether you choose to include a right to occupy or life estate in your estate plan, it is very important to address issues surrounding the occupancy. The most common issues are the payment of expenses on the property, who may occupy the property, what will happen during any period of absence and the right to sell the property if the surviving spouse only has a right to occupy the property. Given the issues involved, the couple should consider having an agreement separate and apart from the owner’s trust outlining the intentions of the parties which can be signed by the party who would have the right to occupy or be receiving the life estate interest.

If you have any questions regarding an existing Trust or would like to discuss adding the right to occupy or life estate interest to your Trust, I see people every day for a FREE 30 minute consultation in Walnut Creek and Brentwood.

Law Office of Joan Grimes

Law Office of Joan Grimes

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Law Office of Joan Grimes

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