My oldest daughter graduated from high school this month and she heads off to college in the fall.  I am not quite sure how that happened!  I still remember bringing her home from the hospital, carrying her in a car seat up to our apartment, and the car seat down on the floor.  I know I have been there for the past 18 years, and I clearly recall taking her to basketball games, choir and band concerts, and supporting her in school work, so I was involved, but it is amazing how the time has passed so quickly.  I am excited to see how the future plays out for my daughter, but she is no longer my little girl.  She is an adult now.

Because it is what I do for a living, I do see how this affects my estate plan. Now that I have an adult child, I realize my estate plan needs to change, again.  Before my daughter was born, I owned a couch, a bed, and an older car, along with some household items.  It wasn’t much.  Then, my daughter was born, and suddenly I needed to be concerned about what would happen to her if I was not around.  Caring for her was a full time endeavor when she was really young, and since I cared about her, I wanted to make sure she was cared for…that was when I wrote my first estate plan.  Now that she is an adult, I am less concerned about who will raise her, and more concerned about what happens to my assets.  I am sure my estate plan will need to change again in the future, as my life changes, but since I am not there yet, I can only see how that change takes place for others.

 

My First Estate Plan Was Focused on Caring for My Child

The most important part of my first estate plan–written when my daughter was a newborn–was to decide who would raise my daughter if I were gone.  Of course, if only I passed away, my wife would be the first in line to raise my daughter and care for her.  I fully trust my wife to raise all of my children, but what if my wife were to also pass away, too?  Choosing the right people to care for my daughter, and all of my children, was the biggest concern we had at the time.  We discussed who we wanted to care for the children as a guardian – our parents, my children’s grandparents; our siblings, my children’s aunts and uncles; or friends, who knew my children – and we considered all the options.  We landed on choosing a sibling, but that is not the same choice that everyone makes.  Some people choose good friends or grandparents.  No one choice is the right one for everyone.  You know your family better than anyone, so you can choose who you want to raise your children as the guardians of your under age children.

Once we picked guardians for our children, we went about the process of living, working, and building up some assets.  When our first child was born, I was still in law school, so I had student loans, and my net worth was a negative number!  As I started working, the asset I had began to grow, and so did my estate planning needs.

 

Today, Estate Plan Needs to Include A More Comprehensive Asset Distribution Pattern

As my children grew, I worked and we bought a house.  The house has increased in value, and it is a major asset that we need to address.  I still have two children who are under 18, so I can’t just give the house to all three of my children yet.  Instead, I have created a contingent, or testamentary trust to hold onto the assets for the use and benefit of my children.  I picked a trustee to control the money and assets until my children are old enough to handle the assets on their own.  My 18 year old daughter is probably mature enough to handle things on her own at this point, but since she is off to college, I am not entirely sure I want to put her in charge of everything just yet.  She deserves to be a college student not burdened by caring for her siblings or handling all the money stuff for her younger siblings.  She is going to need to learn how to be an adult, so my estate plan is growing along with her.

I can put my daughter in charge of her own money, assets, and life, but I don’t need to put her in charge of raising her siblings just yet.  That still falls to our other guardian.  I do have more comprehensive instructions on what to do with the house and other assets, as the assets have grown–and I am sure I will need to adjust my estate plan when my other children become adults.  As my children grow and evolve into adults, so does my estate plan need to grow and evolve.  I suspect your estate plan needs to do the same.

 

My Future Estate Plan Will  Need to Address Future Problems and Challenges

I have watched my parents aging for a long time.  My father retired a few years ago, and he has had some health challenges, so I can see where my future concerns may arise.  My parents are concerned about their money lasting through retirement, and concerned about health care expenses.  I recently had a discussion with my parents regarding how to protect their house from long term care costs.  We are in the process of getting legal protections in place to preserve their assets if long term care becomes necessary.  I am not there yet, but given how quickly my daughter became an adult, this doesn’t seem like it will be too far off for me.  I know that just like my parents’ estate planning needs have changed over the years, mine will also need to change.  As my family has grown, and as my parents have grown, both of our estate planning needs have changed.

 

My Estate Plan Reflects My Current Circumstances, and Yours Should Too

Everyone is at a different stage of life, and your estate plan needs to reflect where you are now.  I often meet with people who wrote an estate plan when their children were small, but now the people are approaching retirement.  The provisions of their estate plan that named a guardian to raise your children no longer apply to the 40 or 50 year old children.  Instead, these types of people want to make sure their assets go to their children, or grandchildren, to enrich and better the lives of the children or grandchildren.  Their needs are different now than from then they were new parents.  The people I meet who are new parents are most concerned about who will raise their children if they cannot.  And this is all exactly as it should be.  Your current estate plan needs to reflect your current life circumstance, so an estate plan really does need to be updated from time to time.  If you would like to discuss updating your estate plan to reflect your current circumstances, please click the link below.