When Tragedy Strikes a Young Family: A Living Trust Case Study

We are pleased when we can help a young family develop an estate plan that fits their needs and honors their wishes. Many couples have good intentions to plan for the unexpected…then the busyness of family life interferes. Parents are stretched thin and planning is put off to another day. But the vigilant press on, realizing what is at stake.

This was the case for our clients, “Jim” and “Anita.” They are in their thirties; they are parents of two young children, and they are avid foodies who also love to travel. After their children were born, they purchased $1 million life insurance policies and knew they needed a will. This is when we met to develop a plan together.

We discussed their goals and priorities for their family and their finances. Careful management of guardianship for their children was very important to them. They recognized that traveling together put them at a higher risk of simultaneous death or incapacitation, so they wanted to factor this concern into their estate plan. We educated them on a plan using wills and an alternative plan using a living trust. We shared the following with them:

After thoughtful consideration, Jim and Anita opted to put a living trust in place. They wanted the smoothest transition possible for their children and their guardians. They learned that a living trust would not only avoid lengthy probateProbate can refer to the process of settling the estate of a deceased person. Read More, but it would give them the ability to provide a lot more direction and support to their children’s guardians (i.e., specific guidance for the use of their resources and covering projected expenses).

The trust would also specify when their children would assume control of their assets as they get older and it would protect the children against life’s troubles, like debt, destructive habits, divorces, and disability, and what happens at their death. And, the trust would save estate taxes and other estate expenses, enlarging the estate that they could hand down. The trust is a powerful tool and we fashioned it to fit their needs.

By contrast, with only a will in place, they could not transfer their estate with these advantages. A will could identify the guardians, but a will alone would put the management of their children’s inheritance into the hands of the court-appointed trustee. True, they can nominate the trustee in their will, but there is no assurance that this person will be nominated. But the most significant consequence of only having a will, is that their estate would have to go through probateProbate can refer to the process of settling the estate of a deceased person. Read More. They wanted to avoid this costly and time-consuming process.

With both a will and a living trust as part of their estate plan, they knew their family was covered and their estate would transfer smoothly to the next generation.

If you have any questions about wills or trusts, please feel free to reach out to us. We’d be happy to speak with you about what each can do for you and your family.