Children and Assets Protection 101

Let’s face it. No one who has reached 18 years today is probably going to be around by 2100.

Ok, so you have great longevity genes? Make it 2150 then. The point is, you will leave this world eventually. That’s why the time has come to start the conversation of what happens to it all when you leave this world. Or if something happens to you. Below are some of the best methods of children and assets protection as well as how to pass on your family legacy.

1.     Own a company.

This is the best structure for passing on wealth made in business from generation to generation. If you dream of leaving your company to your family you must sufficiently include your company as an asset in your estate plan and make sure your beneficiaires will know how to successfully run the business you created or sell the company without you.

2.     Create a Trust.

A trust is a solid agreement. This is because it is written, signed,  sealed and delivered. This is also why we call it a deed. The agreement is between 3 persons : the settlor, trustee and beneficiary. The settlor is the one that needs the agreement to be made so that he can choose a trustee to handle his assets for the benefits of the beneficiaries (those  who the Setlor is going to mention).  So the Settlor is the creator of the Trust (agreement) while the Trustee is in charge when the Settlor is no more available and the beneficiary has been chosen as the person or people to benefit the assets under the agreement.

There are different kinds of trusts. The family trust (also known as Revocable Living Trust) and Education Trust are the two important ones to us for our purpose here.

3.     Write a Will.

A will is an estate planning tool that you use to control how your assets are to be used and managed after, and only after, your death. So a will Only come into effect upon your death. It doesn’t work if  you become incapacitated. In such an event, a public court proceeding could be needed to name someone to manage your assets.

4.     Appoint Guardians for your Young Children.

If you are married, you and your spouse are jointly responsible to choose the guardians for your children. Of course, if something happens to only one of you, the other gets to care for the children and is solely responsible for them.  So the choices of guardians you make now kick in only in the rarer event of when both of you are incapacitated or die simultaneously.

The key thing here is for you to avoid the common mistakes in choosing the guardians for your children.

5.     Leave a Letter of Instruction.

In one case, the wife’s parents sued their son-in-law for taking their daughter off life-support too soon. She had been in coma for about a month. They argued that people have come out of coma in longer time and prayers were still going on for her recovery.  We can only wonder about what she would have wanted. A Letter of Instruction is a medical directive to say what you prefer to do if you become incapacitated or to appoint who you want to make those medical decisions on your behalf. 

This Children and Assets Protection (CAPP) community education series for families is brought to you by Nnanta Chambers.  www.nchambers.com