Families today are busier than ever. Between work, school, and after-school activities, it can be hard to sit down and find the time to think about the future. Thinking about what would happen to your kids if you pass away is difficult but necessary. Young parents should consider whether or not their children will have enough money for their daily necessities, and for college.
Deciding who to appoint as the children’s primary caretaker is also an important decision. Young parents who haven’t completed their estate plan are not alone. A recent survey found that 64% of Americans do not have a Will. If you’re parents to young children, here are a few reasons why taking the time to create an estate plan is so important.
1. CHOOSING A GUARDIAN. Thinking about not being here to raise your kids can be distressing. Nonetheless, one of the most important parts of estate planning for families with young children is to appoint a primary caretaker. Choosing a guardian now can save your children stress and pain in the event of your death. When parents do not choose a guardian before their death, a judge will select a guardian. Parents may not want the person that the court selects as the guardian to raise their children.
When determining who to select as a guardian, consider whether the person lives close by, and whether they are physically up to the task of raising children. Is the person good with financial issues? Does the person have quality relationships? Would they have the parenting skills to raise your children in a safe and stable environment? These are all questions to consider when selecting a guardian.
2. ENSURING YOUR CHILDREN'S FINANCIAL SECURITY. As a young family, you may be working your way into financial stability. Many parents assume that since they do not have a wealth of assets, estate planning is not valuable. Young families do not need extensive assets in order to make estate planning valuable. For example, taking out a life insurance policy can provide the financial security your children need to become well-rounded adults.
We work closely with financial planners and life insurance advisors who can help you select an effective life insurance policy. In some circumstances, creating an irrevocable life insurance trust can be advantageous. Life insurance trusts allow the proceeds from the life insurance policy to pour directly into the trust and become available immediately.
3. APPOINTING A TRUSTEE. Most parents desire to give all of their assets to their young children should they pass away. Children are unable to manage their parents’ estate until they become adults, however, and guardianships end as soon as the child turns 18, which may not be an appropriate age for your kids to receive a substantial inheritance. Appointing a Trustee will help you make sure that your children receive money and assets at the appropriate time and that those assets are managed prudently and effectively until that time. Parents can appoint a Trustee to manage and distribute their assets to their children according to their wishes.
Many young families own cars, retirement accounts, and a house. A Trustee will manage the property for the children's benefit and make sure they receive all of the parents’ assets. When selecting a Trustee, choose someone who is trustworthy and up to the task of administering and appropriately distributing the Trust assets.
At our law firm, we understand that thinking about the possibility of passing away with young kids is difficult. If you need to create an estate plan, we can help you do so. Creating an estate plan early on in life can save you significant money in the long run and give you peace of mind. Give us a call at 253.858.5434 to set up an appointment today. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.