Parents of young children tend to have busy lives. Back-to-school season can be especially hectic, as parents need to buy new clothes and supplies, plan school runs and after-school activities, and refresh their minds about school subjects so that they can help with the kids’ homework. When life is so busy, it can be difficult to think about the future.
Nevertheless, it is important to plan ahead for any eventualities that might affect your family. In particular, you should ensure that you have an estate plan in place so that you know your kids will be taken care of if you die. While “estate” might sound like something that only applies to very wealthy families, it is simply an all-encompassing term for the assets you leave behind when you die. Having an estate plan means ensuring that these assets go to their intended beneficiaries, rather than having a drawn-out probate process in which the courts decide who gets what on your behalf.
While the idea of estate planning may feel overwhelming when your children are still young, there are a few key things you can do to make sure that your children are protected in any future outcome.
Purchase Life Insurance
Life insurance can help ensure that funds are available to continue to provide for your family if you are no longer able to do so. Term life insurance is the most sensible option for most parents because premiums are affordable, and the coverage will be in place as long as your children are financially dependent.
Create a Will and Name a Guardian
Making a will allows parents of minor children to name a guardian in advance, rather than leaving the decision up to the courts. Choose a person who is able and willing to raise your kids and one who shares your parenting values. Ideally, this decision should be made as soon as your children are born.
Update Your Beneficiaries
If you have accounts such as a 401(k) or an IRA, you will have already designated a beneficiary for them, which might be your spouse or life partner. If you want your children to inherit these assets, it may be sensible to make your kids secondary beneficiaries. This will allow them to inherit the accounts if you and the primary beneficiary die. However, if they are minors, they can’t technically inherit assets so move on to the next step which can provide an alternative solution.
Establish a Trust
If your children are under 18 when you die, they won’t be able to directly control any assets you leave them. Rather than allowing the courts to decide who will manage assets for them, consider establishing a trust. This will allow you to designate someone to manage your children’s inheritance and provide instructions on how they should use the funds as your kids grow up.
Thinking about what will happen to your young children if you pass away early is never an easy task. However, you may find that speaking with an experienced estate planning attorney now will give you peace of mind, as well as save you money in the long run. If you are ready to explore your options, our Brandon will and trust lawyers are here to help. Simply contact our office at (813) 438-8503 to schedule a consultation.