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Girl hanging ornaments on tree

Merry Christmas and happy last day of the 25 Days of Giving Series! If you’ve been reading along throughout December, thank you. If you’ve happened upon the GoFisch blog just now, welcome. I hope to see you back here often.

Celebrating the holidays with children, be it family or friends’ children, can be an wonderful opportunity to “see” the magic and delight of the season through their experiences. The season of giving is also an opportune time to teach and reinforce the importance of a different kind of giving beyond the wish lists for Santa and filled stockings. Consider these few tips when teaching the future generation of philanthropists about why charitable giving is important, and how to practice charity during December…and all year round.

Think Tradition

holiday themed cupcakes

Just like decorating cookies, trimming the tree, singing carols, or any other one of your family traditions, charitable giving can be made into an annual family affair. Incorporate this in a way that works for you and your family. One idea is instead of the traditional advent calendar in which children would usually get a small toy or candy each day give some loose change or “gift” a charitable activity you can do together. For the money, the child can collect and then then at the end of the advent period have then donate their money to a cause they care about.

Talk About It Together

Similarly to how I counsel my estate planning clients on the importance of speaking with family members about decisions for their estate, it’s important to actually talk about charitable giving as a family. Indiana University Lilly Family School of Philanthropy conducted a study and found that children whose parents talk with them about donating are 20% more likely to give to charity than kids who do not have those conversations with their parents.

snowmen figurines

Visit local charitable organizations together. (Or, if that’s not accessible at least go online to the charities’ websites.) Introduce your child to what the charity does and why it’s important. Organizations whose missions align with your child’s interests are a good place to start. For instance, the kid who loves animals may be interested to know that the local animal rescue helps animals when they get lost or hurt.

Practice What You Preach: Volunteer Time

Charitable giving doesn’t just have to be monetary. When possible set up volunteer activities you can do together. However, volunteer opportunities for children can be limited, so don’t be afraid to get creative. If your kiddo loves riding her bike around the park, plan a day where you pick up trash around the park. If your son loves to help you plant flowers, see if he can help out at the community garden. Of course, youth organizations like scouting programs (for example), can be a great opportunity for your child to put charitable work into action. Kids, just like most of us, will better be able to “see” the impact of charitable giving when they experience it firsthand. (Note: volunteer time is not tax deductible, but out-of-pocket expenses associated with volunteer work are!)

child in front of stocking

Shared Generosity

From your year-end giving charitable dollars, set aside a portion specifically for the kids to decide how to allocate. Have them brainstorm on with you and provide them with any suggestions/charities to match the causes they care about. You could also try out a matching program. Explain to them that every dollar they save throughout the year and want to donate to charity, you’ll match. If you need a colorful visual explain with Monopoly money.

 How do you involve your entire family with charitable giving? I would love to hear your ideas. Remember, this doesn’t have to be your own children. If you’re a teacher or simply an involved aunt/uncle or grandparent you can still instill in children the important philosophy of why giving can be the best gift of all.
Questions about your own year-end charitable giving? Contact me by email or phone (515-371-6077) at any time. 

Calling All Parents

In your role as a responsible parent you most definitely need an estate plan. One of the most critically important features of an estate plan is establishing guardianships for any minors (i.e., children under the age of 18) in your care. The ability to establish guardianships through your will is one of the (major) reasons I give for stating that estate planning is just as important for young people – arguably even more important – than it is for older folks.

 

couple with child at beach

What if a child’s caregiver is in an accident resulting in disability or even death? It’s tragic and uncomfortable to think about. If the child/children are younger than 18, the question will immediately be, “Who cares for them now?” And I say, immediately, because children can’t wait hours (let alone days, weeks, or months) for the adults around them to sort out an answer—kids need help, care, and support ASAP.

Establishing Guardianship Can Best Be Accomplished Through Will

A guardianship for a minor child can best be established through a Will. For example, your Will could state something like this:

Nomination of Guardians. If I die leaving minor children, it is my wish that such minor children be cared for by my sister, AMY SMITH, and brother-in-law, GARY SMITH, as co-guardians, both of whom may also make a determination of appropriate custody, provided both are still living and are still married to each other. If AMY SMITH or GARY SMITH do not survive me, it is my wish that my brother-in-law, DARREN JONES, and his wife, LAUREN JONES, act as guardians, and both of whom may also make a determination of appropriate custody.

Be sure to discuss your guardianship choices with your family members to be sure they’re “in-the-know” and on board with the potential responsibility of caring for your young ones.

Without Nomination of Guardians, Iowa Court Must “Guess”

Unless guardianship has been established, as in the clause directly above, an Iowa Court must choose guardians. Unfortunately, with no clear choice as to what the former caregivers would have preferred, the Court must basically make its own and best determination as to who the parents would have preferred and what would be in the best interest of the children. The Court may or may not, choose who the former caregivers would have named.

 

child celebrating fourth of july

Spiraling into Conflict

In an extremely stressful situation such as in the case of major disability/death of a caregiver, there may be several family members all sincere in the same strongly held belief that the children would be best taken care of by them. From there, events can quickly spiral into conflict, even a full-blown Court battle. The people who suffer most during this conflict are, of course, the minor children themselves, as they are thrown into an even worse situation.

Oral “Promises” Not Sufficient

OK, you say. But, our neighbors and us, we have a special deal. We’ve talked and agreed, if something happens to us, they’ll be the guardians. If something happens to them, we’ll be the guardians. Isn’t that good enough?

In a word, no. No way. This sort of oral agreement is not enforceable in Probate Court (or any other Court). (Here’s an example of how such agreements fail to hold up using examples from the podcast, S-Town.) The Court might consider this as one piece of evidence among the many other pieces of evidence—assuming this oral agreement can even get admitted into evidence—including in-person testimony by would-be guardians, in order to reach a guardianship decision.

Not to Decide Is to Decide

I’ve known couples haven’t been able to agree who will take care of their children in the event of them both passing. Since they can’t reach an agreement, they bypass the conversation entirely, and leave their children without a legal guardian. Which is, of course, the worst possible decision of all!

A good estate planning attorney can help with this discussion. (Let’s set a time to have this discussion.) A compromise must be reached, to ensure a good plan for the kids.

Testamentary Trust for Children

 

girl blowing bubbles

Further, it’s not just guardians you can plan for in your will, you can also plan material support for your children. Through a will, you can set up what is known as a testamentary trust for your children. This trust will ensure your minor children will be provided and cared for in the event you are gone.

A trustee named by you to oversee the trust, can distribute funds from the estate (with oversight by the estate attorney and the Court), for the following childcare categories:

  • Health
  • Education
  • Maintenance
  • Support

Lawyers often refer to this in shorthand as “HEMS.”

Who Wants to be an 18-Year-Old Millionaire?

When you pass, even at a young age, all your assets (house, vehicles, life insurance, retirement benefit plan) could add up to quite a tidy sum. Without a testamentary trust, a child would simply inherit everything at once, when he/she reaches the age of majority (i.e., on their 18th birthday). No matter how smart and responsible an 18-year-old is, they are still only 18. Most of my clients feel strongly that inheriting that much money, that quickly, would not be good for anyone. (Case in point, this guy learned his lesson from blowing through a trust fund in just a couple years.)

 

 

boy on roof

Instead, in a quality estate plan, a testamentary trust will provide assets to the child/children as they reach different age checkpoints as chosen by the caregivers. For example, the caregivers may decide the children should receive one-third of the estate at age 21, one-third of the estate at age 30, and one-third of the estate at age 40. Or, again, whatever ages and percentages the caregivers think best and most appropriate.

Contact Me for a (Genuine and) Free Consultation

I know this can be a lot to think about. So, don’t hesitate to reach out at any time with any questions, concerns, or considerations. You can also get started on the creation of an estate plan by filling out my Estate Plan Questionnaire.

Estate planning revisions

Oh, you have an estate plan? High five!

You are already better off than most of your fellow citizens. In fact, numerous surveys have shown that about half of adult Americans do not even have a basic will.

So, kudos to you if you’ve already knocked out this major life decision and planning initiative. If you already have a will, there are at least five major scenarios in which you should revisit and make changes accordingly:

  1. Moving out-of-state or, of course, out-of-country. What makes a will legal and valid in Iowa is not the same in other states, like, say, Ohio or Rhode Island. Each state has its own set of laws governing wills, probate, and so on. Also, if you buy property in another state and/or set-up a secondary residence, this must be included in your estate plan.
  2. If something happens to one of your beneficiaries or fiduciaries. Life happens to everyone else in your plan, and sometimes this means beneficiary passes away or a fiduciary retires. Reviewing your plan’s key contact list at least annually, in addition to on an as-needed basis, will keep everything fresh and relevant.
  3. If your marriage status changes. Needless to say, you will want to update your estate plan in the case of a marriage or divorce. Every attorney I know, myself included, has heard horror stories of what happens when an ex-spouse inherits a huge sum of money, merely because an estate plan wasn’t properly updated.
  4. If you have kids (or more kids). You’ll want to ensure that in case something happens to you that your children are going to be protected by a trusted guardian. And, also, presumably you’ll want to add the children as beneficiaries, etc.
  5. If your financial situation changes significantly. This includes inheriting money or complex assets. Perhaps your business accelerates astronomically. Maybe you have what professional advisors call “a liquidity event,” (e.g., you’re flush with cash). Your estate plan, and its distributions, will need to be revisited to accommodate such changes in fortune.

life change ahead road sign

This, however, is just the tip of the iceberg. I wrote a longer blog post about revisiting your estate plan in light of major life changes, which you can find here.

Have questions? Need more information?

A great place to start is the Estate Plan Questionnaire, or feel free to reach out at any time. You can contact me by email at Gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.