Estate Planning for Problem Children in SA

Estate Planning for Problem Children in SA

Estate Planning for Problem Children

An increasing number of Baby Boomer parents are concerned about leaving unconditional bequests in their Wills to their grown-up children, for fear that they will squander their inheritance.

As parents we love our children and want them to receive the benefit from our hard work after we’re gone.

However, some kids just seem to attract hard luck and trouble, don’t they?  They can be immature, have difficulty holding a job, or are just poor money managers. Some develop a bad and expensive habit, like gambling, drugs or alcohol, while others suffer mental illness.

Then there are the risky-business kids, who constantly fear the door-knock from the bailiffs because they run their businesses on the knife-edge of bankruptcy and litigation.

Choosing a Guardian for Your Children

Choosing a Guardian for Your Children

What is a testamentary guardian, and why do I need one for my children?

A testamentary guardian is an adult nominated in a parent’s Will to care for their minor children in case both parents die before the children turn 18.

When we have young children, we understand that if one parent dies, the other parent will automatically retain parental responsibility. But in case both parents die prematurely, each needs to nominate in their Will an alternate testamentary guardian for their minor children. Otherwise your children may end up in a home you wouldn’t choose for them, being parented in a way that’s not in accordance with your values.

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Critical Importance of Making a Will to Protect Children’s Inheritance From Previous Relationships

Critical Importance of Making a Will to Protect Children From Previous Relationships

Blended families include children form previous relationships (step-children).  They are growing quickly in number, but many people do not stop and think about the implications on children from previous relationships if they die without a Will.  It is a dangerous assumption that the law will automatically protect your biological and step children, as numerous scenarios can preclude or reduce the amount that they receive after you die if you do not seek the counsel of an experienced Wills lawyer in Adelaide.

What Happens If You Die Without a Will?

South Australian law provides that, depending on the size of your estate, your children from previous relationships may receive nothing if you die intestate. For estates valued at less than $100,000, the entire estate goes to the surviving spouse or domestic partner unless a valid Will is in place. For larger estates, your spouse is entitled to the first $100,000, your personal belongings and half of the estate’s balance.  Without litigation, at best your children will receive equal shares of the remaining balance (if any).

Wills and Estate Planning Adelaide: Kids Growing Up

As a parent, what is our worst fear?

Kids Growing Up

For most of us, it would be receiving that phone call telling us that our child is having a medical emergency. It might be a car accident, or some other health crisis, but as soon as we are notified we want to rush into action to help them.  No matter how old they are, they will always be our child, even if they are now an adult.

It used to be that when a child turned 21, he would receive a key to the front-door of the family home, in a rite-of-passage symbolising and acknowledging their transition from child to adult.

With the faster pace of life, and changing societal expectations, the legal age-of-majority is now18.

Did you know that if your children are aged 18 or older, even if they are still living at home with you, then you are no longer able to make their medical decisions for them? In fact, you have no right to speak with their doctor or nurses or see their medical records.

Wills and Estate Planning Adelaide: Wills, Trusts and Estate Planning for New and Young Parents

Wills, Trusts and Estate Planning for New and Young Parents

New and young parents often mistakenly consider that have too few assets to bother with creating an estate plan.

They probably have a home with just a small amount of equity, and hopefully they have decent jobs, and reasonable prospects for advancement.

Most of us have superannuation, and many super funds carry life insurance.  In dollar terms, it is not uncommon for young people to be worth more dead than alive.

When considering estate planning they should think about naming a guardian for their children and to make sure their money goes to the kids.

Most people grossly underestimate the money it will take to raise their young children and educate them. They frequently only have a small fraction of the life insurance that is needed. Fortunately, term insurance is relatively inexpensive for young people.

They should consider establishing a Trust to receive the insurance and other assets. This can be done through a Testamentary Trust created in their Will, or as a Discretionary Trust.

A trust provides some asset protection, and professional management for the funds.

Wills and Estate Planning Adelaide: Estate Planning Challenges of Blended Families

As more Australians get married more than once, estate planning issues involving blended families are becoming more common.

Estate Planning Challenges of Blended Families

A blended family is where there are children from more than one relationship and they raise particular challenges for estate planning.

A typical example is where a man has children with his first wife, then re-marries a younger woman and has additional children with her.

Because marriage automatically revokes all prior Wills, his older children may be concerned that his new wife and her children may influence him to their advantage, at the expense of the older children’s inheritances.

This is a growth area for lawyers who work in the area of Family Provision claims, where Wills and estates are challenged in Court.

If you have a blended family, you need to exercise considerable caution when creating your Will and estate plan.

Wills and Estate Planning Adelaide: Estate Planning to Show Your Family You Love Them

Estate Planning to Show Your Family You Love Them

How can you show your love for your family even after you are gone? None of us knows what the future holds. My godfather died in his 20’s and he left his young wife with a 3 month old baby to take care of. It doesn’t matter what stage of life you are in, you need to be prepared.

Here are a few practical steps to help you be prepared from a financial and administrative perspective.

1. Create a legal Will and keep it up to date.

Even if you don’t think you have a lot of assets, you need to have a Will because you don’t want the government to dictate what happens to your property after you are gone. It will save your family a lot of time and grief, because getting an estate in order after someone has died without a Will can take a lot of time and money.  You may be surprised by how many possessions you own … Super, life insurance, a car … it all adds up.

It is important to discuss who will care for your children if something should happen to both parents. It is certainly a hard decision and there are many factors to consider.

Don’t risk a DIY Will-kit. They are little more than expensive pieces of stationery, and offer no backup or support. They even say on those kits that they are not intended as a substitute for legal advice!  They are the cause of a growth-area in estate-litigation, because so many people make mistakes with them. The problems will only show up after you’re dead and gone.  Then it’s your family & loved ones who have to wear the cost and all the delay and heartache to try to fix it all afterwards.

Wills and Estate Planning Adelaide: Estate Planning for Children with Special Needs

Estate Planning for Children with Special Needs

Most parents of disabled children worry about the day they won’t be around to help care for them, whatever their age.  They want to help them qualify for government (state or federal) assistance for medical and other services, and also to provide for their recreation, clothing and other small luxuries that improve the disabled person’s quality of life.

The difficulty for these parents, is in trying to grapple with the too-hard decision of who will look-after their children after the parents have gone. Many cannot overcome this emotional-paralysis, and simply hope against hope they will live just slightly longer than their child, so that neither parent nor child ever have to deal with the situation.

The reality is that most disabled children outlive their parents, so providing for their care after the caregiver’s death is a vital issue. If the parent simply leaves money for the child, it could disqualify the child for government assistance, but still not provide properly for the child’s special needs.

A special needs trust may present a solution. A lawyer specialising in the legal needs of the elderly and disabled, can help the parents or other family members to set up a trust.  With careful planning (both legal & financial), the assets may not be taken into account by the government when assessing the child’s entitlement to assistance, but distributions from the trust are used to provide greater comfort & independence for the child.

In this way, even after the parents have died, they can continue to care for their children. This can assist children with a variety of disabilities, including Down syndrome, autism, cerebral palsy, the aftermath of vehicle accidents, chronic diseases or anyone who may need a combination of government and private services to provide a good quality of life.