As a parent, you expect your children to outlive you, and you likely anticipate needing to provide for them for the rest of your life. Such as the nature of the parental relationship. Not only will you need to think about your children’s needs for the rest of your life, but you also have to think about what they will require for their safety and well-being after you die.
You will quickly realize that you should no longer procrastinate about estate planning when you think about what will happen to your young children when you die. If you already have an estate plan, you likely realize that you need to update your documents so that they better protect your children.
What estate planning moves do parents commonly make to help their children?
Choosing a guardian
Perhaps the most important reason for parents to create a will or update their existing one is so that they can name someone they trust to serve as the guardian of their children if anything were to happen to them. The guardian will have legal responsibility for the children, which means you have to balance the need for responsible behavior with the ability to compassionately care for your children.
Providing financial support
You likely want to ensure that your children have resources after losing you and can maintain a decent standard of living. Estate planning allows you to achieve that goal. You may want to update the beneficiaries for your life insurance policy or purchase life insurance if you have not done so already.
Additionally, you will want to allocate certain assets for your children’s cost of living expenses. You need to determine what assets you want your children to receive and what, if any, property would go to other people.
Protecting your legacy
Simply naming your children as the beneficiaries of your estate won’t be enough to ensure that they benefit from the proceeds of your life insurance policy or the property that you bequeath to them in your will. Technically, until your children turn 18, anything they inherit will be under the control of their guardian or their other parent.
By moving the main components of their inheritance to a trust or using your life insurance to find a trust, you can limit how the guardian accesses their inheritance and preserve as much as possible for when they come of age. Additionally, the trustee can be a secondary source of support for your children beyond the guardian who cares for them.
Adding to your estate plan or creating documents will help you better protect the child you just added to your family.