One of the Problems We See at the Law Office: Estate Planning for Young Children

Testamentary Trusts and POAs

Your husband is working late so you get your daughter from the baby sitter and stop at the store for groceries.  You see a cute baby riding in another grocery cart holding a doll.  She looks up and asks her mother, “Should I have a Will for my baby like you have for me?”

After supper and when things get quiet you mention the Will thing to your husband.  But his droopy glazed eyes are locked on the TV screen and he seems to sleep through your attempt at conversation.  The next day at work, you hear the term Testamentary Trust for Minors.  You think of yourself as a good parent, but is there something others know that you do not?  Is there something Mom did not know or mention?  Maybe so.  So you email your local attorney and set an appointment.

You tell the attorney that you are not rich, that you and your husband have good potential as your jobs and careers progress, but all you have now are debts and life insurance.  And a baby.  You do not expect to die any time soon.

The attorney agrees that death is not very likely, and even disability is fairly low on the probability scale.  But if anything happens, then a Will can be very useful.  And so can a Durable Power of Attorney.  He reports that many families do execute Wills which include provisions to protect children.  One clause can be used to give a responsible adult authority to care for your babies if you suddenly die.  A second set of clauses can give a responsible adult power to collect and use your life insurance proceeds for the care of your babies.  The clauses are often called a Testamentary Trust; “Testamentary” because they are part of a will, and “trust” because they give someone control of your property for the benefit of a third person, your child.  A Durable Power of Attorney can give your spouse or another responsible person the authority to act on your behalf to help make decisions with your financial affairs in case you are incapacitated in an accident or by some other disabling event.

The attorney smiled and said, “I sometimes tell my clients that if we help you sign these forms, then you will be guaranteed to never need them.  If we do not, then you will need them the next day.”  So you decide to proceed and avoid the risk of needing them when it is too late.

Witte Law Office

6125 Havelock Ave
Lincoln, NE 8507
402-467-5080
glen@wittelawoffice.com