The Young Family Estate Plan (YFEP)
Parents of young children often overlook the need to plan for death or disability. Many believe they don’t have enough assets yet or that anything they have will automatically go to their spouse. However, every young parent needs basic documents – a Will, Power of Attorney and Health Care Proxy – what we term a “Young Family Estate Plan” (YFEP), that formalize your wishes in a variety of unexpected circumstances.
Without a YFEP, if one spouse dies, any assets that were in the husband’s or wife’s name alone will be subject to a court proceeding to name an “administrator” of the estate and New York law decides who gets which assets. The first $50,000 goes to the surviving spouse and the rest is divided 50% to the spouse and 50% to the children. The court will appoint a legal guardian to manage the money for them and then, ready or not, any remaining funds would be turned over at age 18.
If your spouse becomes disabled, and you don’t have a Power of Attorney for them, you must petition the court to be appointed as your spouse’s legal guardian to handle their affairs (such as selling or refinancing the house or drawing funds from their accounts). The court may decide against you as legal guardian and appoint someone else.
A YFEP also includes life insurance reviews and recommendations, so in the event your spouse dies you will have the financial resources to raise your children.
A YFEP (1) ensures that all of your spouse’s assets go to you and not half to your children if your spouse dies unexpectedly, (2) allows you to choose the legal guardian for your children, and at what age they will receive the unused assets, (3) avoids guardianship proceedings should your spouse have a disabling accident or illness, and (4) provides the financial wherewithal so that your children may continue to prosper and thrive.