For Your Kids
For minor children Or financially irresponsible adult children please see Trusts versus Wills.
Financially Responsible Adult Children:
Many of our older clients, who have adult children, plan to and expect that they will leave some significant property or money for their children when they die. Over the years the lawyers in our firm have helped to see that this plan is realized. This goal can be helped by a properly drafted trust. Again, please see Trusts versus Wills
However, we have also seen cases in which the good intentions of the two parents to leave something significant to their children does not come to pass. Three common problems prevent this from occurring:
- A Parent Re-Marries
It may happen that after the death of one parent, the surviving parent re-marries a younger spouse and much of the parents' estate ends up going to the new spouse. This is a difficult situation to anticipate in estate planning because typically a couple will agree that when one dies the second should have all of the couple's money. Most of our married clients do not choose to specify that upon the death of the first, there should be some partial distribution to the adult children.
- Medical Expenses
We don't know how we will die and how expensive the process will be. The basic Medicare Part A that everyone who qualifies gets for free can leave a tremendous amount of medical bills uncovered. Most of our clients, especially, those in their sixties or older, are quite definite in their desire that their medical care be cut-off once there is little hope of recovery or recovery to a certain level of independent living. Please see Health Care Power of Attorney which can help somewhat, but not with certainty in this area.
- Bad Choices
It may happen that the parents or the surviving parent will make bad decisions with their money before they die. As explained in Trusts versus Wills A trust can anticipate the disability of a surviving parent or both parents and allow the adult children to step in to protect the estate. However, people who are completely mentally competent can make investment decisions which in hindsight are bad decisions. Bernie Madoff was a con man whose victims included many wealthy, intelligent investors.
Affluent Parents With Financially Responsible Adult Children
Our advice to affluent parents with financially responsible adult children is this: If you can afford to do so, give some of your wealth to your adult children while you are still alive. You will have the pleasure of giving and the certainty of having made the gift. Their is a German proverb that says, "Better a gift from a warm hand than from one a cold one."