When creating estate plans, families often make provisions for minor children, including the financial care and guardianship of those minors. However, minors grow up and often head to college. When a Michigan family sends a now-grown child to college, it may be the perfect time to sit down and rethink an existing estate plan.
An existing plan may give a child a specific amount of money and number of assets. If that child is now 18 and in college, handing him or her a substantial amount of money in the event of parental death may not be what is best for that adult child. One way to ensure funds are distributed and used in a manner of which the parent approves is to create a trust. This can give the parent the freedom to distribute a percentage of the funds at specific intervals rather than in one lump sum, which could open the door to misuse or manipulation by others.
Another aspect of estate planning many families may not consider is that once college age children are 18, they may need specific estate plan documents for their own protection. As a young adult, if a child is in an accident or becomes incapacitated, a power of attorney may be needed to ensure decisions are made by trusted adults. Financial decisions may need to be made also, necessitating a power of attorney so financial matters are handled without interruption.
During milestones and when family circumstances change, adjustments may need to be made on many levels. Adjusting an estate plan during these times of change can help prevent any missteps or unexpected surprises in the event of a death or health crisis. Michigan families may want to communicate plans and share ideas as to which estate plan options may best suit their needs during these life changes.
Source: huffingtonpost.com, “Kids Off to College? It Might Be Time for an Estate Plan Update“, Steve Cook, Sept. 28, 2015