1. Life Insurance
Having a child or children brings a monetary responsibility to provide for that child. As the saying goes “nothing in this life come free” rings very true as it relates to the costs of raising a child and ensuring them the very best start in life. In the event of an untimely death Life Insurance can offer great peace of mind that your family will not struggle financially upon your passing. Life Insurance is a valuable asset that all families should consider as it can provide the resources to pay off debts and provide resources for your children’s financial future to be guaranteed in the event that they can no longer rely on your income.
2. Nomination of Guardianship
Of course the idea of not raising your own child is a daunting prospect, it is much better be prepared for the unlikely and unfortunate than to ignore the possibility. By having a well thought out nomination of guardianship, you can identify and spell out whom you would like to raise your children in the unfortunate event that you are unable to do so. A tailored nomination of guardianship, enables you to spell out exactly how you would like your child to be raised, what school they will attend, what values they will be brought up with etc. By having this document in place you are ensuring that your children will never be to subject to foster care nor will the court nominate someone to care for your children, without knowing your wishes.
3. Trust for Child’s inheritance
A trust for your minor child is a very important planning mechanism as without one, state law does little to guide the minor child who is the recipient of a large inheritance. If the parents have no estate plan in place and if both parents pass on leaving minor children, the court will appoint someone to look after the children’s inheritance. This individual will most likely be a stranger and will cost money. The minor children will receive outright at 18, all the inheritance that was available to them. The inheritance is distributed to the 18 year old without consideration for the teenagers ability to manage money or otherwise. Most parents would prefer that their 18 year old son or daughter not have unfettered access to potentially large amounts of money for fear of squandering. By have in place a trust you can outline and identify what, when and in what method you would like your children to inherit.
These 3 Estate Planning tools are not dispositive and there are many other Estate Planning documents that can be put in place for great reason for the benefit of you and your entire family. By starting with these 3 estate planning documents, you know that in an emergency and tragic situation that renders you unavailable to raise and support your child, your child’s basic needs will be met.