3 Reasons Parents of College Students Need an Estate Plan
If you have a child in college or a child soon heading off to college, congratulations are in order! You’ve raised someone from a tiny child to a near-adult. It’s often a time of celebrations beginning with graduation parties and are quickly followed with shopping trips to outfit the dorm room and college campus orientation trips. While this stage can be exhilarating, it’s also a time to consider critical legal tasks. When is the last time you updated your estate plan?
Parents of college-bound children frequently focus on changes closest to home like what to do with that extra bedroom now that their child is out of the nest. But whether the extra space is best used as a home office or a home movie theater isn’t nearly as important as the estate planning tasks that are needed.
Estate Planning Tasks for Parents of College-Bound Kids:
- Review Your Estate Plan: At this stage of life, you must review your estate plan thoroughly. A lot of things change once a child turns 18. Any life event, such as a child leaving home, should result in an estate plan review/update for necessary changes to reflect the new scenario. For instance, your estate plan most likely names a guardian to care for any minors. Once your child is 18, children do not usually require a guardian unless they have special needs. You probably have a general idea of how your child approaches and manages financial matters. Use that knowledge of their financial behavior to guide your hand in creating estate plan documents related to their inheritance. Some estate plans designate lump sum disbursements while others incorporate spendthrift provisions to a Will or trust. You might consider using a discretionary trust with a trustee regulating when disbursements are made from the trust and how much is appropriate or simply specifying periodic payments instead of a lump-sum inheritance.
- Incapacity Planning: It’s never too early to start planning for elder years. Put a durable power of attorney in place. The named agent can immediately begin to handle your affairs if you become incapacitated.
- Legacy Planning: Parents of college students and college-bound children are often approaching retirement. Their thoughts may be turning towards intangibles like what they’re leaving behind – what legacy they are creating. Some consider adding a dynasty trust to their estate plan that transfers wealth to children and future generations. Others choose to include a charitable remainder trust that allows you to provide a chosen charity while still receiving an annuity that could help fund retirement while also reducing income tax liability.
If you are the parent of a college-bound student and you haven’t yet updated your estate plan, please don’t waste any time. Get in touch with the experienced Florida estate planning attorneys at Elder Solutions Law Firm right away. We are ready to assist you in preparing or updating your estate plan documents to protect your family.