Deciding to make a last will or estate plan isn’t just about having control over your belongings and you die. It’s also about making sure the people that depend on have what they need to get by in your absence.
Your family will likely never need the protections that you put into an estate plan created with minor children in mind, but everyone can feel a little more secure knowing that you have taken precautions in case anything were to happen to you and your spouse.
There are certain steps you need to take as a parent to ensure that your children have adequate protection in the event that anything happens to you.
Choosing an appropriate guardian is only the first step
Determining who you trust enough to take care of your children if you aren’t able to do so requires careful consideration of an individual’s abilities and bond with your children. Sometimes the obvious answer isn’t necessarily the best option.
Once you have a shortlist of guardian candidates, you should speak with each of them about whether they are willing to step up in such a capacity. Their agreement is important so that there are no surprises in your estate plan.
Think about protecting your biggest assets
You may have multiple, large assets that could provide for your children for years or maybe even cover the cost of their college tuition. Life insurance policies, real estate, retirement account and investment accounts are all valuable properties that you need to consider protecting.
Depending on the overall value of your estate, there could be tax implications if you don’t plan ahead. On the other hand, your family could also potentially lose assets to Medicaid or creditors if you don’t take steps now to protect your assets.
Think about what your children will need until they become adults
Obviously, a guardian who cares about them and a safe place to live are at the top of the list of things your children need after they experience a tragedy. However, they will also probably need support transitioning into adulthood as well.
If you directly bequeath financial resources to your children, their guardian will likely have control of those resources and could diminish them before your children become adults. Planning carefully to leave certain assets untouched to give your children a chance at a successful adulthood without your support can be one way to leave a meaningful legacy if you aren’t there to see your children grow into adulthood.