“LOW COST PLANNING OPTIONS FOR YOUNG PARENTS”
by Ayako Nagano

I'm frequently asked by young parents if there are simple things they can do to prepare for the worst case scenario. "What if something happens to us? What would happen to the children? What is the minimum we should do to prepare for our children?"

First, you’ll need to think about who would raise your kids if you couldn’t. As a lawyer, I am trained to prepare for the worst events in life - they call it the parade of horribles in law school. Many of us don’t really want to think about it, but you can make simple arrangements of a guardian in your will, so that you can declare your preferences.

NAMING A GUARDIAN

It’s recommended that you choose one guardian, and then an alternate guardian in case your first choice doesn’t work out. It’s a good idea to talk to the people you want to appoint as guardian before you put your intent in writing.

The guardians will need to be 18 years or older in most states, and should be able to handle the job. It’s OK to name two guardians, for example, a couple who have been together for a long time, but in general, it’s not a good idea. Co-guardians often disagree, and disagreements can be both costly and time consuming – it’s not in the best interest of your child.

NAMING A SEPARATE PERSON TO MANAGE THE FINANCIALS

You can appoint the guardian to also manage the finances for your children, or you can appoint a different person. Being a good caretaker doesn’t always mean that they would also be good with money.

Some young parents with no assets have opted to purchase term life insurance which terminates when the children turn 18 or 21 years old. Term life insurance is less expensive than permanent or whole life insurance, which guarantees coverage at fixed premiums for life.

DECLARING YOUR INTENT BY WILL AND LAST TESTAMENT

Most states require at least two witnesses to witness your will, meaning that the witnesses must watch you sign your will, who then must also sign the will, declaring that they in fact witnessed your signing. There are some other technicalities to a validly witnessed will, so you’d want to read up on the requirements in the state that you live in, or check with a local attorney.

LOW COST WAYS OF DECLARING YOUR INTENT*

- Statutory Wills, Online Wills

Certain states also publish statutory wills online. For example, California law provides for a "fill-in-the-blanks” will form. The will form is designed for single, married or divorced people with relatively small estates. Please see: http://www.calbar.ca.gov/Portals/0/documents/publications/Will-Form.pdf for a sample.

You can also research other online publications for guidance: http://www.nolo.com/legal-encyclopedia/statutory-wills.html

- Holographic Wills

Many states accept simple, handwritten wills called “holographic wills.” In those states, a holographic will is deemed valid as long as:

1. You had mental capacity to write the will (meaning that you weren’t mentally incapacitated by dementia when you wrote the will),

2. You hand write the will and sign it (you should date it as well), and

3. Your intent is clearly expressed in the will.

The following states recognize holographic wills made within the state, though witnessing requirements vary: Alaska, Arizona, Arkansas, California, Colorado, Idaho, Kentucky, Maine, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

See also: http://en.wikipedia.org/wiki/Holographic_will and http://www.nolo.com/legal-encyclopedia/statutory-wills.htmlhttp://www.nolo.com/legal-encyclopedia/holographic-wills.html

If there is anything you do not understand or you are making any provisions which are complicated or unusual, you should ask a qualified lawyer to advise you.