Legal Eagles and others....Trust fund for support/education on death of parent?
I attended a very interesting course Wed night "Legal Considerations in the Foreign Service". Covered basics of wills, trusts, POAs, domicile, yada yada. I'm in "get our legal crap in order" mode right now so it was very informative and the gears in my mind are turning. But we didn't get to the section I was most interested in as the course ran long--legal and financial considerations for children. So I'm interested to hear how you guys have things set up to provide for children in the event of a parent's death when the parents are divorced.
Before I moved in with DH (and got rid of my house), I insisted that he draw up a will so that in the event that he got hit by a bus or something and died, I would at least not be immediately homeless (transfer of deed on death type thing). The plan in the past was that if DH kicked the bucket, the LI payout would go into trust to support the kids til they were college age and then go towards their college expenses with any remaining balance to be split between the kids when they turned 26. I was named as the trustee. There is nothing in the CO about DH having a policy payable to BM. There is nothing in the CO (that I'm aware of) regarding payment for college education.
A lot has changed with our situation since the will was first done so we need to redo it and I plan to sit down with an attorney sometime soon. At this time, we do not own a home, I am not working, and there is no LI policy on me anymore. I have no debts in my name. We do have a LI policy on DH and a retirement account and I'm the sole beneficiary of both. Because I'm not working and most likely will not be while we are abroad over the next 17 years til he is retirement age (FS kicks you out at 60) my SS benefit (if it still exists when I'm of that age) will be pretty low. And because DH had to cash out his previous retirement plan to pay to BM, we are getting a really late start on that as well. So thinking longer term, a LI policy really needs to be something that can get me on feet and potentially provide for me post retirement to a large extent.
It is important to us to make sure that the kids are provided for though. We cannot get more than 500k in LI through most companies on DH due to the safety issues with his job, and some won't insure at all. So if you figure about 24k/year in CS/expenses til kids are 18/graduate HS, that's 100k, and college costs at our state's school right now are about 22k/yr with room and board (and going up every year), we'd want to have at least 300k available at minimum for the kids to keep things status quo. I'm thinking that maybe we need to have more than one LI policy. One payable into a trust that we set up NOW for the kids and then one LI policy that goes to me.
DH's parents and BM's mom are all reasonably wealthy so even if we did no planning, I have no doubt that the kids would be cared for. But it really is our responsibility so trying to figure out the best way to go about this.