Protect Your Family and Investments: Create A Will

By Leah Woolson

    New parents hope to protect their children from all that could harm them. Although they may have all the diapers, bottles, toys and safety equipment to last until the child is 30, the parents need to take that next step in protecting their child's future. This includes the financial, educational and medical security that a will provides.

    This process, when standing on the outside, can look confusing and daunting, but it is "good to be prepared and to have thought about what will happen in the future" said Mary Louise Caffrey, a lawyer from Bradley and Faulkner in Keene, NH.

    The first step towards obtaining a will is finding the right lawyer, suggests Albert H. Weeks, judge at the Cheshire County Probate Court. Many lawyers specialize in this aspect of law and have a full grasp of all that is required. Lawyers can be found at the American Bar Association website at www.abanet.org or by asking a friend how they went about it.

    Once a lawyer is chosen and an appointment set up, an asset profile will be sent to the parents. Caffrey said the asset profile is a good exercise, but people seem to hate to do it. The asset profile involves evaluating current material property which includes the home, furniture and car, plus any savings and retirement accounts. Open communication is necessary for this initial step in creating a will, allowing for the appropriate designation of the property to the child.

    Many times the asset profile will be done with the lawyer during an initial meeting, considering many parent's hesitancy in filling it out. Questions pertaining to bank accounts, stock investments and beneficiary designations many times "intimidate and overwhelm" the parents because of the complexity of all the assets, said Gary H. Sheldon, lawyer for Sheldon and Wells.

    Once the asset profile is completed, parents should consider examining the educational, medical and financial needs of their child.

    The evaluation of the child's needs lead to the most important element of the will for parents, which is designating the appropriate guardian for the child. Sheldon asks that parents "understand that, even if they do a bare bones will that just says 'I leave everything to my husband or wife or my three kids and my guardian is Aunt Sue,' that's not perfect and it doesn't give you all the nuts and bolts of a trust, but it gets you a very high percentage away from where you were to where you should be."

    Many parents find this part of the process "the showstopper," said Caffrey, because of the painful idea of their child living without them. Commonly, new parents will designate their own parents as guardians. Caffrey warns that although this is a good option, the need to update the guardianship as time goes on is necessary. Remember, the child's grandparents aren't getting any younger.

    It must also be taken into consideration whether the guardian for the child will also be the guardian for the child's finances. This distinction is important because the guardian of the child's finances will then be able to delve into the trust for expenses that come along in a child's life, instead of waiting until the child reaches a certain age to access the trust.

    When creating a will, the parent must consider the benefits that having a trust provides. A trust is a legal title, whether it includes tangible or intangible property that is held for the beneficiary by another person.

    The three trusts that are most common are the revocable trust; the special needs trust, and the testamentary trust. This is not to say that there are not numerable other trusts to fit different needs, but these below are just the most commonly used ones.

    The Revocable Trust is private and most commonly used because of its efficiency, explained Caffrey. It is a trust that can be altered during the life of the grantor (the person who created the trust) while allowing assets to be passed to the beneficiaries without going through the process of probate. This can save a lot of dough, considering the process can be expensive.

    The revocable trust was likened to a bucket by Sheldon. During the parent's lifetime things, such as property or investments, can be added into the bucket. This trust also guarantees that, upon the death of the grantor, the Probate Court will not become involved, which is the case for other types of trusts. Whatever is not covered in the trust, the will then covers, stating that this property or these finances will go to the beneficiary, allowing complete coverage of the assets.

    Another type of trust that is used frequently is the Special Needs Trust. This trust is a trust for children with a disability or mental issues. It allows for the child to get the appropriate help, whether through public nurses or assistants. The child is able to maintain a stable life without losing the programs and essential government benefits. If necessary, this type of trust also allows the child's finances to be taken care of through alternative means if the child is mentally unable to do it him or herself.

    The third type of trust is the Testamentary Trust, in which state oversight is incorporated into the will. It is not created until after the person dies. This type of trust is expensive because of the continuing oversight that is necessary. It also makes the trust public and accessible to anyone who wishes to see it. This type of trust is governed by the Probate Court, resulting in its ability to get tied up in court for years after the grantor's death.

    With several other options available, a lawyer can safely guide those willing to set up a will through the process. Protecting the child's future, especially if the parent is not there to guide him or her through it, is an essential part of parenting and a step that should not be overlooked.