In the excitement of having a baby, we often forget to plan for the unexpected. Luckily for you, we have four estate planning tips for parents to help you do precisely that.
Appoint a Power of Attorney
When there is a newborn on the scene, it is essential you and your partner execute a power of attorney. So, if something awful happens to you, someone you trust is able to access the funds they need to care for your child.
This same person will also make health care decisions on your behalf while you are temporarily or permanently disabled.
If for whatever reason both parents are not around anymore, your child will need a guardian to look after them during your absence.
In layman’s terms, a guardian is just someone who is given custody over your child.
Top Tip: It is imperative to check with the potential guardian first whether they are happy to undertake this huge responsibility. Yes, it is a massive compliment, but it is also a burden.
The role of a guardian slightly differs from a trustee; this is someone who has control over your child’s finances.
Make Your Wishes Clear
If you sadly pass away without a will, your estate is equally split between your spouse and your kids (by default).
It is common for parents to want the other parent to have the entirety of their funds once they are deceased. If you fall into that camp, you will need to make this wish very clear in your will.
Once more, minors cannot own property. So, if you are planning on leaving real estate to your children, you need also to detail the age they are permitted to access your former estate.
Review Your Life Insurance
In the unfortunate event you pass away while your children are still young, life insurance is essential. This is the only way to guarantee they will receive sufficient funds after you are gone.
If you have not purchased life insurance yet, consider how much money you think your family will need. That is in addition to how long you think you will need a life insurance policy (as horrible as that is to contemplate!)
Unfortunately, this is something you will need to consider as you decide whether to take insurance that covers a set period or a policy that lasts the duration of your lifetime.
Once you have taken both these factors into account, you will be in a better position to purchase appropriate coverage.
We hope you found the above estate planning tips useful. If you have any questions on the subject or need help with creating a will and settling your estate, we are always happy to help. No question is too big or too small for us.
Contact us today to schedule a consultation.