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Christine Benz: Another category of individuals I'd like to discuss would be the new parents of a young child. So, maybe people who are in their peak earning years--what should they have in mind?

Deborah Jacobs: Well, the most important thing--and it's something that I recommend people do almost immediately after becoming parents--is to be sure that you have a will. This is not only to transfer assets but to appoint a guardian for your child if for some reason the child is orphaned. People don't realize that a will is the only document they can use to do this, and if they don't, then the whole matter has to go to court.

And, by the way, not being able to agree on a guardian is a major stumbling block for young parents--even those who are fairly diligent about wanting to do their will.

So, I do have a suggestion for them about how to get past it, which is if you can't agree on one person, then have in your his and hers wills naming different people. So, say she names her sister, he names her brother. You hope it never comes to pass, but at least you are covered and you have a will.

Benz: So, what happens, though, if the spouses for whatever reason happen to pass away at the same time?

Jacobs: Well, then a court would need to decide, but at least you have two people out there and available rather than having the court start from scratch.

Benz: OK, and I assume you think it's also wise to let your guardians know that you are appointing them as guardians and make sure that they are comfortable with that assignment?

Jacobs: Yes. That's very important, and I think people should choose them carefully. If your college roommate has a wild and woolly social life, this is not the person to chose. So, you do need to think in terms of, is this someone who could stand in your shoes as a parent? They are never going to do as good a job as you did, but you do need to consider their suitability.

Along those lines, I also like to advise people to create a trust for the money that you leave the child under these circumstances, and put someone in charge of that trust who is not the same person who you make the guardian.

Benz: So does everyone need a trust for their child, regardless of means or would this mainly be for wealthier folks?

Jacobs: I'm talking now about the situation in which your child might be orphaned and although many people think that trusts are only for the wealthy, this is an example of a situation where I think even much less affluent people ought to think in terms of a trust, so that if you pass away, the money that you leave to raise your child is in safe keeping.

And I think that when you make the guardian of the child the same person as the guardian of the money, you do build in certain conflicts of interests, and you don't get the kind of checks and balances you would get if you name different people for different functions.

Some people think, "well, if I trust some with my child, I ought to be able to trust some with my money too," and that has some emotional appeal, but I don't think it's nearly as practical.


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On Estate-Planning for Singles