Anthony Brown

Financially Protecting Your Child in a Parenting Partnership

Co-parenting families are unique in many ways.  From an Estate Planning point of view, the most significant difference is the lack of a marital relationship to secure basic protections.  So how can you make sure that you, your co-parent and your child are adequately protected?

First, get on the same page with your co-parent about how best to protect one another.  Some parents want to provide direct monetary relief to their co-parent should something happen to them.  Others want to leave their money in trust for the child or children.  Whichever you choose, make sure that your co-parent is aware of your wishes and that he or she has the information they need to act if you were to become disabled or die.

Second, draft an estate plan that creates the type of protection strategy that you want.  You may wish to include your co-parent in your Will as a beneficiary.  If not, you may want them to serve as a Trustee for money that you leave your child in Trust.  Leaving money in trust for your child allows you to control the distribution of that money, i.e. when they receive the principal amount, and also who controls the investing and distribution of the money.  Naming the other co-parent as a trustee makes sense for many, but it is not necessary.  If you do not leave your money in trust, it will be distributed either through your estate according you your Last Will and Testament, making the executor of the estate the manager of any money left to a child, or by designation, as in a life insurance policy or other designated beneficiary account.

Finally, keep your estate plan up to date.  What makes sense now may not make sense in ten years.  If you put money into a trust, make it a revocable trust so that you can easily change the terms of the trust or abolish it altogether.  Make sure that your estate plan includes medical power of attorney designations and living will instructions.  Once you have an effective estate plan in place, you can rest assured that your family will be protected if you can’t be around to protect them.

Anthony Brown

Why Parenting Partners Need To Save Financial Records

Hindsight is 20/20.  While most people do not think about, much less prepare for, their unexpected death, I can guarantee you that a little pre-planning will save you a lot of time and a lot of money upon the death of a loved one.  This is particularly important when it comes to parenting partners, who may not live together and therefore may not be aware of where each is keeping his/her financial documents.

Knowing what information to is crucial to streamlining the asset transfer process after death.  Different states have different probate requirements, but one thing is certain, the more preparation you do, the easier the transition from a co-parenting unit to a single parent home.

Make sure that you have all of your financial information located in one place and, if there are designated beneficiaries for any of your insurance policies, 401(k) accounts or IRA accounts, have a list of those beneficiaries with their related accounts of policies.  The easiest way to collect this information is to keep a copy of a recent financial statement (a bank statement, a mortgage coupon, a brokerage statement, a 401(k) statement or an insurance policy premium payment) in a folder you keep in a safe place.

You should also include and share with your parenting partner a current family tree which includes all relatives out to first cousins, with their contact information.  Some states require that the closest living relative of a decedent be notified upon the death of a relative.

If you are concerned about ensuring that this information stays safe, you may want to have your attorney keep this information for you at his or her office.  Knowing that you have this information in one place not only creates peace of mind, but it may significantly lessen the amount of time and money that it takes to distribute your estate upon your death.

Anthony Brown

Are You Ready For “The Talk”?

Friday December 14th 2012 will forever live in the souls of all Americans, particularly American parents, as a day of terror, shame and heartbreak.  The Sandy Hook Elementary School shootings were an unconscionable reminder of how the unexpected can change everything.  On a very personal note, I spent that day alternately weeping and hugging my three-year-old son.  I was emotionally drained.  Later that night, I thought that I was coming down with the flu as I had a fever, was coughing a lot and my whole body ached.  Little did I know that I was headed for an unexpected emergency hospitalization that would change my life.

My husband of 23 years and I had foresight to do all of our estate planning many years ago.  We updated our documents at the birth of our son and we travel with everything a non-traditional family needs to “be safe” in areas of the country that do not recognize us as a family.  While my particular relationship may, or may not, compare directly to that of a co-parenting couple, the value of careful estate planning is essential to everyone, especially if there are children involved.

When we were waiting in the hospital for a doctor to explain exactly what was going on, up until that moment, we only knew that I had an attack of diverticulitis, we were not ready for what happened.  A young intern walked into the room and his first words were, “You know this is really bad, don’t you?”  I looked at my husband, who was beginning to tear up, then back at the doctor and said simply, “no, I didn’t.”

He explained that I had multiple perforations of the colon and that my abdomen was infected.  I had a 70% chance of needing emergency surgery and there were many risks involved.  He then left the room.  His need for a lesson in bedside manner aside, my husband and I proceeded to have, “the talk.”

The insurance documents are in a folder in the closet.  The bank account information is in a secured document on the computer.  Call our financial planner when you get it together.  I don’t care about having a viewing.  The first people to contact in case I don’t make it are…  I went from a normal day in my life to “the talk” in a heartbeat and I am here to say that if we did not have our estate planning “ducks in a row,” it would have been the worst “talk” of my life.

As an addendum, I am on the mend and have been slowly, but surely, healing, thanks to the love and support of friends and family.  But when I didn’t know if I was going to make it or not, I couldn’t help but think of the absolute vulnerability of life, as exemplified by the 26 lives that were lost in Newtown Connecticut on December 14th 2012.  When it comes to your children, there is nothing that should stand in the way of making sure that they are provided for just in case the unexpected actually happens.

Anthony Brown

Welcome to the FBD Estate Planning Blog!

Welcome to the Family By Design Estate Planning Blog!  I am delighted to host this forum for co-parents and potential co-parents and look forward to addressing the estate planning issues that will undoubtedly confront parenting partners on their journey to creating the family that they want.

A couple of givens to start: first, the ground work for estate planning for co-parents has, to a large degree, been laid by committed unmarried couples who choose, for one reason or another, to remain unmarried.  Whether it is a same-sex couple in a long term relationship who cannot get married under their state’s law, a straight couple who simply chooses to remain unmarried, or a divorced couple who are raising children separately, the estate planning strategies designed to protect unmarried co-parenting couples have been tested.

Second, while emotionally the concept of co-parenting may be foreign to many, knowing that you are not wading into unchartered waters from an estate planning perspective is a blessing.  Creating the most protected relationship from which to parent your children is the goal and there are many tools from which to choose to achieve that goal.  Wills, Trusts, Guardianship Designations and access authorizations are just a part of the comprehensive estate plan.  All of these I will be addressing in my article posts, as well as here on the blog.

Finally, understanding that there may sometimes be third parties in the mix (partners of the co-parents), there is an additional layer of protection that needs to be addressed to ensure that the co-parent’s wishes are met in their respective estate plans.  While the law protects the relationship that a parent has with their children, it will not automatically protect co-parents who are not a legal parent, unless there is a legal contractual agreement in place that defines the relationship.  An interesting wrinkle may appear if the co-parent is married to a third party.  The marriage, by law, creates protections which may supersede the co-parenting relationship.