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Category: parent estate planning

5 Tips for New Parents to Prepare for Baby

By Sarah Stewart Legal Group

A new baby brings parents so much joy. There are so many things you have to do to prepare- get baby clothes, diapers, bedding, design a nursery, just to name a few. The list seems never-ending.

Usually one of the last, but most important, items on a new parents’ to-do list is to get their financial and legal plans in order.   We’ll cover the 5 most important ways to prepare for new baby legally and financially today.

(1) Get Life Insurance

Life Insurance serves a very specific purpose. Life Insurance allows you to protect your family financially and prepare if something happens to you.  Life insurance helps your children pay for college and/or your spouse take care of the day-to-day necessities, like daycare, food, and shelter, if you are not there to contribute.

(2) Set Up A Monthly Automatic Draft Deposit for Savings

Many banking institutions allow you to schedule a monthly draft from your checking account to your savings account. Set up a high yield savings account with a monthly draft you can afford so you can guarantee you are building your emergency fund.  Experts recommend having 3 to 6 months of bills in savings in case an emergency arises. Even a small monthly amount will add up over time.

(3) Make an Estate Plan

Now that you have a bouncing bundle of joy on the way, you need to think about who will take care of him or her if you and your spouse die.  It is not a pleasant thought, but it is much better to decide now than to not have made the decision at all if that day comes sooner than you expected.

You will also want to be sure you have a plan in place for how your money will be spent for your children’s care.  Without a trust, the money will go to the children’s Guardian, or the children if they are 18, as soon as you die.  If you want to make sure the money is protected, or have specific wishes for when the children can access the money, you will need a Trust to enforce those wishes.

(4) Reduce Debt

One of the greatest scams of all time is credit card debt.  Anyone who has suffered from stifling credit card debt knows the downfalls of using credit cards for purchases.  Having a baby will only accelerate those problems.  Make a plan and budget now to help you be free from debt.

(5) Put Money Aside for Baby

Whether you choose a simple free savings account with your local bank, or a 529 education savings plan for advanced education, it is important to have some money stashed away for your child’s future-whether that future be education, entrepreneurship, or traveling the world.  Over 18 years (or more), even a small monthly savings can add up.  So, start saving today.

A new baby brings so much joy, excitement, and responsibility.  Be sure to use this guide to prepare for your baby and your financial future.

Ask Your Financial Advisor These 5 Questions

By Sarah Stewart Legal Group

There are a wide variety of financial advisors to choose from nowadays.  Some are fiduciaries, required to act in your very best interests, some are not.  Some have extensive credentials and training, some just left their previous career as a bartender at your favorite club.

With so many options available, how can you choose the best financial advisor for you? Today we discuss 5 questions to ask your advisor to make sure they are the right fit for you.

(1) Are You an Investment Advisor or a Financial Planner?

There are a wide variety of Investment Advisors in the Financial Planning world, there are also Financial Planners. Investment Advisors do exactly that–they help you decide on the best investments to make, usually in stocks, bonds, and mutual funds.  Financial Planners have a wider scope.  They assist in helping with budgeting, investing, estate planning, and insurance policies.  These two worlds are not necessarily mutually exclusive.  Many of the best Investment Advisors will consider your financial plan as a whole and many Financial Planners have experience and success in choosing proper investments.

So, this is not the only consideration in this question.

If you want an Investment Advisor: Ask about their investment strategies.  Do these strategies align with your own? What types of investments does the advisor prefer? Can you understand their investment strategies? Are they a chartered financial analyst or do they have one on their team?

If you want a Financial Planner: What is the planner’s desired demographic and expertise? Identify situations unique to you and ask the financial planner about their experience in that area. Ask if they are a certified financial planner or chartered financial consultant.

(2) Do You Have Fiduciary Responsibilities?

A fiduciary must put your interests before their own when making choices about your retirement portfolio. Many financial advisors are fiduciaries. Registered investment advisors, or those who work for registered firms, are usually fiduciaries as well.  Fiduciary responsibilities may not affect all areas of your retirement portfolio with that particular advisor, so be sure to ask, and understand, where their fiduciary responsibilities end.

(3) How Are You Paid for Your Services?

Are they commission-based, fee-only, or fee-based?  Those who work on commission get a commission for recommending a particular product.  Fee-only advisors do not receive commissions.  They are paid by charging certain fees for certain services. Fee-based advisors receive commissions and fees for the products they sell.

(4) What Are Your Credentials and/or Designations?

Advisors can carry specific designations.  These are explained below:

Financial Planners:

Certified Financial Planner- CFPs must finish an educational program, pass a financial planning exam, and have extensive financial planning experience.

Chartered Financial Consultant- ChFCs must complete an educational program, pass several exams, and have extensive financial planning experience.

Investment Advisors:

Chartered Financial Analyst-CFAs must pass a rigorous educational program with a series of exams and must have experience in investment decision-making.

(5) Do You Have a Backup Plan?

What happens if the advisor leaves the business, is on vacation, or becomes disabled?  Is there someone else who will step in as your advisor? There should always be someone available as a backup contact when your advisor is unavailable.

3 Essential Estate Planning Documents for Newly Weds and New Parents

By Sarah Stewart Legal Group

Marriage and babies are huge life-changing situations.  These happy times take up so much of our minds each and every day that the importance of planning for our families after these events can be a distant afterthought.

Estate plans are important, even though most new families do not have large estates.  There are many considerations that still need planning, such as guardianship of a child if the parents pass away, and/or ensuring spouses keep the full estate if one of them dies.

It is always important to plan these aspects of your estate and not let the Court determine them for you.  There is no better time to start planning than soon after the honeymoon or new addition arrives!

Every new family should consider the following 3 Essential Estate Planning Documents.

(1) Will or Trust

At the very least, spouses should have Wills in place outlining their wishes for their assets after their death.  Maybe surprisingly, Oklahoma law rarely allows spouses to keep all of a deceased spouse’s assets, unless a Will or Trust says they can. You also have the opportunity to name someone to care for your children if both you and your spouse die.

You will also want to decide if you want your family to go to Court if something happens to you.  If the answer is no, you will want a Trust, or other probate avoidance planning, in place to protect your family from the increased financial and emotional burden of court proceedings.

(2) Powers of Attorney

In Oklahoma, no one is automatically allowed to act for another individual.  If you have joint accounts and property, both spouses can access that information.  However, if any property is separate, the spouse cannot access it without a Power of Attorney, or other legal permission.

Also, spouses are not allowed to make Medical decisions for their incapacitated spouses under Oklahoma law, without a Medical Power of Attorney. If you or your spouse get into a car accident that leaves you unable to walk for any amount of time, you will be glad you have a Medical Power of Attorney in place.

(3) Advance Directive for Health Care

Under Oklahoma law, no one has the authority to withhold life sustaining treatment for someone who cannot make his or her own medical decisions.  The only document that authorizes withholding life-sustaining treatment is the Advance Directive for Health Care.

The Advance Directive consists of 3 parts. (1) The document takes you through several scenarios and asks you to initial for each one if you would want artificial hydration and nutrition only, no life-sustaining treatment, or everything. (2) The document then asks you to choose a health care proxy. The proxy can make medical decisions for you when you can’t, including whether or not to apply life-sustaining treatment. (3) In the third part, you state your wishes for organ and tissue donation.  You can donate for transplantation to other people, or for dental or medical research and advancement.

These documents are the bare necessities that everyone, but especially newly weds and new parents, should have for their estate plan.

An estate plan is a living organism that evolves and changes as you and your life change.  Please be sure to put a plan in place, and revise it as your life circumstances change.

My Child with Special Needs is an Adult. Now What?

By Sarah Stewart Legal Group

Each family with a child with Special Needs has specific and unique circumstances and concerns.  Their legal issues are also unique.  This makes finding a trustworthy professional who can help them navigate those problems challenging.

If you are a family with a loved one with Special Needs who will soon be over the age of 18, here are some legal issues to consider:

(1) Estate Planning

When a child with Special Needs becomes an adult with Special Needs, there are more options available for government benefits.  What is available to whom depends on the specific needs and circumstances of each family.   Some children will be able to live mostly independently from their parents and manage their own assets, others will not. Some will be able to work part time, others will not.

Be sure to research all the options available for your family. Think about how your child will react and his or her ability to manage assets they may inherit when you’re gone. Will he or she need help managing their day-to-day lives?  If so, you may want to consider a Special Needs Trust.

Also, keep in mind that some benefits may be income-based. For those benefits, a Special Needs trust will usually be required to protect your child from losing those assets once you’re gone.  If your child lost his or her benefits, would he or she be able to navigate the system to get them back? To learn more about Special Needs Trusts, click here.

(2) Adult Guardianship

Another potential problem to consider is what happens when your child reaches the age of 18 and is considered an adult.  In Oklahoma, 18 year-olds are able to enter agreements with people and corporations and are considered capable of making business and personal decisions for themselves without parental consent.  Though, arguably, most 18 year-olds do not truly have that capacity, the law is the law and your child will be faced with making adult decisions everyday when they hit the magical age.

Most people with Special Needs are more vulnerable to bad people and bad circumstances. If you have concerns about your child’s ability to “adult” when he or she is 18, you will need to file for guardianship to protect him or her.  To file a guardianship, you will need evidence of the condition that makes your child unable to care for him or herself physically or otherwise.

You will file this information with the Court, issue notices to the closest family members and the child, set and attend a hearing and provide annual reports on the child’s condition to the Court. This is the only way to ensure your child is fully protected.

Some families choose not to seek guardianship.  Maybe the child is mostly capable of “adulting,” or maybe the network the family has built is supportive, understanding, and does not require a guardianship in order to function.  You must review your own familial situation to decide if guardianship is right for you.

If you need help navigating these complex issues, be sure to reach out to professionals you can trust. You will need to find professionals who are familiar with Special Needs issues and understanding of your situation.

What Happens When a Child Inherits Assets in Oklahoma?

By:  Sarah Stewart Legal Group

Sadly, not many parents have thought about what happens to their children when they pass away.  Understandably, most of us don’t like to think about death and think we have all the time in the world to plan.  We can’t imagine a tragedy that takes us from our children before they’re adults.  But, unfortunately, it can, and does happen. We’re only a freak accident away from our own mortality.

So, if you’re a parent, it is important that you prepare for the worst and hope for the best.  If you do not have an estate plan in place, your assets will pass by what is called the law of “intestacy.”  Intestacy is a law where the state determines who gets your assets and how they are split. Under this law, the spouse gets a portion, and the children get a portion and so on.

So, what happens to the children’s portion if they are under the age of 18?

Children Inherit Outright

If the children are receiving assets outright, the other parent, or a Guardian appointed by the Court will care for the property. Though the Court will have some oversight of the assets, Guardians will manage the property and can receive money for costs they have for their duties.  Also, the Court oversight itself can be costly.  These costs usually come from the child’s assets.

Though the assets will pass to the child when he or she turns 18, depending on his or her age, many assets can be eaten up by court and guardianship costs alone before the child receives the assets. When the 18 year old receives the assets, there is no longer oversight of how they are used. You, and the Guardian, have no say over their actions.

For additional oversight on the assets and a chance to ensure your children use the funds properly, families should consider starting a trust.

Children Inherit Through a Trust

The best way to protect your children’s inheritance is with a trust.  In the trust, you will name a Trustee to manage the children’s assets until they reach an age you choose.    Trustees are required to act in the best interests of the children.

This is an especially good option for blended families because the parent from the previous relationship will not have full management of the assets, the Trustee will. You can be as broad or detailed as you would like in restricting the assets.  You can give them all to the child at a certain age, or require the funds only be used for certain reasons.  You have total flexibility.

You will also name who you would like to act as Guardian and care for your children if you and the other parent are gone. This lessens the chances your family members will fight over your child in Court, or your child will wind up in custody with the Oklahoma Department of Human Services if both parents die.

As parents, it is our duty to protect our children and their interests.  Take some time today to sit down and decide what that looks like for you and your family.

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