Children are typically the main beneficiaries of a parent’s estate plan. Especially when they are still minors, you will want to ensure that they have adequate protection until they reach adulthood if you are not there to care for them.
Too many parents fall into the trap of assuming their family will be fine because their spouse will take over if anything happens to them. What updates or inclusions to your estate plan will help you better protect the children in your family?
Naming a guardian in your will
It can be a daunting task to decide on the right person to take over your parental responsibilities if anything happens to you. However, if you don’t take the time to pick someone, there may not be anyone willing or able to take that responsibility in a tragic situation where you die young. When you take the time to choose a guardian for your children, you provide them with the best support possible if anything happens to you.
Consider creating a trust
A will can allow you to leave property to your children or name a guardian for them, but it won’t prevent their guardian from misusing that inheritance before they turn 18. A trust is an additional layer of protection against financial abuse and misconduct by caregivers.
You can create firm limitations on the use of trust assets so that there are resources for your children when they turn 18. The trustee that you name can also be an important source of oversight for the guardian caring for your children.
Review your life insurance
Children aren’t in a position to financially support themselves the way that a spouse is if anything happens to you. They will be fully dependent on the guardian you name and the resources you leave for them.
While you may have only worried about caring enough life insurance to pay for your own funeral previously, you may now need to think about paying off all of your credit card debt and providing resources for your children until they reach the age of 18. Additionally, you want to make sure that you update the beneficiary of your life insurance so that your children can receive those assets.
Making the right estate planning changes when you add children to your family will help ensure their safety and well-being, come what may.