Depending on the stage a family is in, there are different concerns that need to be addressed.
Young Children: For families with young children it is important that you have specified who you would want your child to live with if you weren’t there. You need to make sure that your minor child is not the beneficiary on your life insurance or retirement accounts. Instead, name a trust for that child’s benefit. The trust will provide guidelines on how and when your child (or his guardian) can get access to the money. A trust helps protect your child’s money from his guardian’s creditors or divorce. It also helps provide guidelines on how you want your child raise: Do you pay for college? Do you want to buy your child a car at 16? Does the child have to contribute to these costs, assuming he is able?
For single parents with problem ex’s, it is especially important to plan so that your wishes regarding guardianship (and the reasons for those wishes) will be known if you passed away. You may also want to make sure that your ex will not get control of your child’s money, even he or she is your child’s legal guardian.
Adult Children: Sure your children may be adults, but have you stopped worrying about them? Concern that their son or daughter may lose their inheritance in a divorce is one of the primary worries parents have when they come see me. Unfortunately it does happen. The good news is that with proper planning you can protect your adult children from losing their inheritance in a divorce and provide asset protection other types of lawsuits as well.
Let’s face it. Nearly every family has a “problem child”. The problems may include financial irresponsibility, drugs or alcohol abuse, gambling or inability to hold a job. There are ways that you can protect your child from him or herself and provide an income stream for that child’s lifetime with extra money available for other needs. The trust should be drafted to meet your child’s specific needs.
Special Needs Children: Any child, minor or adult, with special needs needs to have his share set up in a special type of trust. Special needs can include Down’s Syndrome, learning disabilities or any other physical or mental condition which will make it likely that your child will have to rely on Medicaid or other governmental program for his or her care. A special needs trust directs the trustee to pay for needs that are not being provided by government programs. The trust is designed to supplement the beneficiary’s lifestyle without disqualifying him from needs based programs.