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Young parents with busy schedules and fast-paced lives may not consider what will happen when they pass away. However, planning for it in advance offers peace of mind. Estate planning for young families is just as important as estate planning later in life. While we don’t expect to pass away at a young age, we never truly know when our time will come, and the best defense against this great unknown is to be prepared.
Here are a few questions you should answer when estate planning for your young family. For the best possible results, draft answers to these questions with the help of an estate planning attorney.
#1 – Who Will Care for My Children?
The most important question to answer will be deciding to whom you’ll transfer the duties of caring for your children after your passing.
This task is especially significant when estate planning for young families, as those who estate plan in later stages of life usually do not carry this caretaker responsibility anymore.
Should you fail to answer this question in your estate planning, your local courts will decide who gets the caretaker’s responsibility. So it pays to sit down and genuinely consider who would care best for your children after your passing.
#2 – Who Will Manage My Assets?
You may have personal assets on hand, like your house, car, retirement funds, and other stores of value that may require managing after your passing. Deciding who will manage and distribute these assets accordingly is key to successful estate planning for young families. To do this properly, you’ll need to designate an executor or someone in charge of ensuring your last wishes to ensure your wishes are fulfilled as you planned.
#3 – Who Will Manage the Children’s Trust Fund?
Although there are several estate planning myths you may have heard, if you do not have a family trust fund, now is the perfect time. A trust fund set up in your will may be an exceedingly valuable long-term asset for your children and any other beneficiaries you designate. Leaving assets behind in a trust for children is a common feature associated with estate planning for young families. The idea behind this is that the beneficiary of your estate (namely your children) will be too young to be able to manage these assets on their own. A trust is an estate planning tool that you can utilize to enhance your estate plan, ensure that assets are protected and make sure that they are distributed and managed in a way that is in accordance with your plan. Therefore, selecting the right trustee for your trust is critically important.
#4 – Should I Set Up a Life Insurance Policy?
A life insurance policy directly benefits your family after your passing. Should you suddenly pass away, the funds from your policy will provide your family with the necessary means to pay off debts, eat, go to school, and continue living their lives. Consulting with a financial professional is the best way to determine which type of life insurance policy is right for you and your family. This is not a decision you want to make alone.
Don’t Wait Until It’s Too Late
Putting off estate planning for your young family is a risk that you should not take. The alternative to not setting up an estate plan results in the courts deciding what happens to your children and assets after you pass away. It’s worth putting in the extra time and effort to ensure this isn’t the case.
Related: 4 Differences Between a Supplemental Needs Trust and a Special Needs Trust