Make a will

You can choose anyone that is legally able to care for your children. It does not have to be a family member. If you do not appoint a guardian in your Will, the state will decide who cares for your children.

Before appointing a guardian, ask yourself the following questions:

• Is the person mentally and physically healthy enough to care for your children? Are they young enough to raise your kids?
• Is the person financially stable and can you trust the person to manage the money left for the care of your children?
• Do they live in an area or would they be willing to remain in a location of your choice? Such as a certain school district or close to other family members.
• Do they have children of similar ages? Or, do they have too many kids?
• If I have many children, do I want to keep them together, or would splitting them up be okay?
• Do they have beliefs similar to mine? Religion, education, health care preferences, and diet may be topics to consider.
• What would happen if the couple you choose later divorces?
• Do your older children have a preference?
• Do you need another person to manage your children's trust or inheritance?

After you choose a few candidates, discuss their duties with them to see if it is something they'd want to agree to. You want to pick those who are not only capable but willing.

An executor is a person or professional executor who is appointed to carry out the terms of your Will. Tasks include organizing assets and paying your debts. Once debts and financial obligations are met, they distribute your remaining assets. Depending on the size of your estate, this can be a challenging task. To help ease the burden of families and to minimize family disputes, many often hire a professional executor. Professional executors cost about three to five percent of the estate.

Who should I appoint as my executor?

Choosing an executor can be challenging. An immediate family member may not always be the right choice. Plus, you should never feel pressured by anyone to make a specific selection. Since family matters can become emotionally charged, many opt to hire a professional executor (accountant, trust company). Additionally, you will need to appoint a secondary executor in case the first cannot fulfil their duties due to death or illness. Before appointing executors, notify them of their duties and ensure that they are willing to take on the task. Don't forget to update the document periodically if needed.

What to consider when choosing an executor:

• Are they responsible? Do they have the financial savvy to make good choices for you?
• Do they manage their own finances well? If they cannot manage their own money, they may not be the best choice to manage yours.
• Is the person in good health mentally and physically? Do they have the stamina to fulfil their duties?
• Is the person legally qualified? Do they have a criminal past? Are they non-citizens located out of the country?
• Is the person patient? Can they avoid family drama?

Assets held in a Living Trust can be distributed more quickly than a Will. If you can afford to fund a Trust, it can be used to provide for your children until the rest of your assets and insurance payments are released.

Advantages to Living Trusts include (depending on the type of Trust):

• Speedy allocation of assets
• No need for probate
• They are private
• Trusts are difficult to challenge
• Assets are not subject to creditors
• They can control how and when assets will be allocated

An inheritance tax is a state tax paid by the one who receives money or property from a deceased person. Most states no longer charge this tax. An inheritance tax differs from an estate tax. An estate tax is taken from an entire estate before assets are allocated. Not all estates have to pay an estate tax since the threshold is rather high. The 2017 federal exemption level for estate taxes was $5.49 million. The federal inheritance tax lower threshold for 2018 is $5.6 million. Roughly only two percent of estates are obligated to pay these taxes.