After paying off some high-interest debt I would look to the future, which would include starting an account for my one-year-old daughter's future college plans. My wife mentioned starting a large wedding fund, but I told her it is unlikely that my daughter will ever get married because I’m not going to let her talk to any boys after she turns 5.
With all of the future planning that would take place in this scenario, I had to consider another important, though somber, scenario. What if my wife and I are not around anymore? What happens to these plans? This is where Elliott's guidance was helpful. I learned that even if I had life insurance to cover the difference, what happens to this money is a sobering reality.
The reality is that at the age of 18 my daughter would receive all of these assets, including the aforementioned check for $300,000.
If I received a check for $300,000 at the age of 18, I would currently own the original animatronic T-Rex from the movie Jurassic Park. While I still think this would be a really cool conversation piece in our living room, I now believe paying for education, healthcare, and other life essentials is much more important.
The alternative to trusting a teenager with hundreds of thousands of dollars is to create a Revocable Living Trust. This Trust will only distribute assets for the essentials in life, including education, healthcare and support, until the child reaches a more mature age.
Another benefit of this Trust is the option to designate a guardian for a child in a Will, and a separate trustee to handle the money. This way if you have someone who would be great at raising kids but might try to buy the original animatronic Jurassic Park T-rex with the money, it is possible to split up these duties.
The sad reality is that nobody has given me a check for $300,000 yet. The good news is that with my current assets, life insurance and Revocable Living Trust, I know my daughter will be taken care of in a responsible and loving way no matter what the future has in store for me.
If you have any questions on the information contained in this blog, see the estate planning website of Cincinnati attorney, Elliott Stapleton, with CMRK Law, 123 Boggs Lane, Cincinnati, Ohio 45246, or contact him at (513) 334-0099.