Estate planning is crucial to anyone with multiple assets, businesses, or properties. It is the best way to ensure your worldly possessions are fairly and accurately distributed amongst your family in the event of your death or inability to continue caring for them. It is especially important for those who have young children. Estate plans need to be watertight to ensure your children receive what you wish them to, once they become of appropriate age, as well as ensuring they are cared for correctly after your death. Below we have gathered some of the most important steps to follow when estate planning for young children.
Name Your Children As Beneficiaries
In any will or estate plan, you must name beneficiaries. These are the people who will receive your assets after you have gone. You may, most likely, choose to name your partner as the primary beneficiary of your assets after you pass, but it is important to name your children, too. You should name your young children as secondary beneficiaries if you are happy to leave your partner in control of everything after you pass. Though, it is of course possible to name multiple people as a primary beneficiary. If your children are too young, they will have to wait until the age of 18 to access any financial benefits left to them. As the experts over at AtlantaEstateLawCenter.com explained to us, these can include properties, life insurance policies, retirement savings, and any other cash or assets you may have. Without the actual written list of beneficiaries, things can become complicated after you pass, so ensure that your most valued family members are listed where you wish them to be.
Designate A Guardian
In most cases, only one partner passes away, leaving the other in charge of the younger children. However, it is important to consider all possible outcomes. What happens if both you and your partner become too unwell to care for your kids? Or both pass away shortly after one another? You must, in case of this, name a legal guardian in your estate plan. You know you want your children to grow up in a safe and secure environment with someone you trust, so make sure to have this plan in place. The peace of mind alone is enough to make you want to do this. Guardians will not take over any part of your estate – unless instructed to do so in your will – but will simply be given parental guardianship of your children.
Draft Healthcare Directives
An advance healthcare directive is a part of your living will, which directs how you should be cared for in the event of accident, disability, or incapacitation. This document can explain how much should be spent on your care, who should be allowed to take over your assets during this time, or who should run your business. This may not sound directly linked to your young kids, but it can be. Whilst in the care of your partner or guardian, you may want to direct exactly how your kids interact with you while you are ill. It can also help direct how your partner or guardian should function during your illness, to help keep your kids safe and happy.
Trust Fund Management
Setting up a trust can be a very powerful and responsible way of ensuring your children receive the finances you want them to receive, at the right time. Many parents are afraid that if their kids received a huge lump sum in their teens it would all be spent irresponsibly and lost, giving the child no long-term benefit whatsoever. With trust, however, you can set dates on exactly how and when your children receive these finances. For example, many trusts are set to be released at age 18 for college, or age 25 to assist with purchasing a home. You can break this down however you wish – 10 payments over 20 years, 1 lump sum on one birthday, however, you want. Whatever you see fit for your kids can be written into a trust, Trusts have other benefits, too. Some can help avoid taxes and probate, making your family’s life easier after you are gone.
These are the four most important aspects of setting up an estate plan whilst you have young children. After all, all we really want is for our children to be cared for, get what they deserve, and grow up safe and happy. Using these tools will help ensure all of those things are possible for your children, even if you are not around. Get planning your estate asap, with a good lawyer.