Although it is a difficult subject to face, you have options when it comes to protecting your estate and your family. The steps you take now can help prevent the wrong people from making decisions for your loved ones.
If you have minor children, who will take care of them in the event of your passing? Although no one likes to think about this, it is crucial that you make a plan.
A recent article from Military.com, titled “Protect Your Children's Future,”offers some ideas on how to protect your children. For starters, make sure to you have a will drafted by an experienced estate planning attorney. Be sure to name one or more people to be the legal guardian of any of your children you may have under age 18. [Note: In some states, like California, a will is not the only way to appoint such a guardian. Be sure to consult with an experienced estate planning attorney in your own state.]
A guardian is tasked with making decisions regarding the care and upbringing of your child. You should talk to this person prior to drafting your will to be sure they accept the responsibility. You should also have a back-up guardian in case the designated guardian is unable to serve. In addition, you can name someone other than the guardian to be in charge of overseeing your children's financial affairs. This serves as sort of a built in “checks and balances” to make sure the guardian is not tempted to use some of the inheritance for personal purposes.
Another way to help your children is to establish a trust to protect the property you intend to pass on to them. This can be done regardless of your children’s ages. Just like the guardian, an important piece of this is designating the right person to serve as the trustee. This is the person who will manage the assets and make distributions based on your instructions in the trust document. Trustees can be individuals or institutions, as well as combinations of the two.
The original article recommends having a financial protection plan that includes Life and Disability Income Insurance. What would happen to your children if you were to die or become disabled and unable to work? Would there be enough assets to provide for their upbringing and education? An experienced insurance professional can help you determine how much money would be necessary to help protect your children in coordination with your will or a trust.
Living Documents. All parents need an up-to-date power of attorney, health care proxy and living will. A power of attorney allows a trusted agent to pay your bills for you and manage your finances according to the terms of the document. The other documents give you the opportunity to express your desires concerning the use of life support and other treatments to keep you alive, and permit medical decisions to be made for you if you are incapacitated.
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Reference: Military.com (February 27, 2015) “Protect Your Children's Future”