Becoming a parent is a common motivator for people to establish estate plans. Parents want to know that their children have support and adequate protection even if something happens to the parents while the child is still young. An estate plan is a way to provide minor children with support.
Parents who have thorough documents can navigate life more confidently knowing that their children have protection regardless of what happens to them. The best estate plans include a variety of documents and unique terms based on the specific needs of the testator.
What are some of the most important decisions people make when estate planning with their children’s well-being in mind?
Empowering appropriate people
A parent has the option of naming a guardian in their estate plan. They can choose someone they trust to assume parental authority if they die and can no longer take care of their children.
Selecting an appropriate guardian is a critical estate planning move. It is equally important to name someone competent and ethical to act as their personal representative. Ensuring proper management of estate expenses and resources is important for the preservation of an individual’s legacy.
Preserving appropriate resources
Parents establishing estate plans also need to consider the financial expenses associated with not just childhood but also early adulthood. Parents often help their children pay for college, rent their first apartment or cover wedding expenses. Life insurance proceeds and estate resources can help provide financial support to children who lost their parents even years after the tragedy.
Unfortunately, guardians and surviving parents may not prioritize the protection and preservation of those resources until the children become adults. Parents planning for the financial support of minor children frequently decide to protect specific resources, such as the family home or their life insurance proceeds, by using them to fund a trust. The trustee provides an additional layer of protection and can manage those resources until the child beneficiaries in the family reach adulthood.
Planning for an emergency
Children can be left in an emotionally difficult situation and financially vulnerable should an emergency incapacitate their parents. Powers of attorney designating people to handle medical and financial matters can prove invaluable should a car crash or other emergency scenario arise. Additionally, parents may want to provide advance directives explaining their medical wishes so that children and other family members don’t have to question personal preferences regarding care.
Making an effort to establish or expand an estate plan can be a smart move for those with new children in their families. The right estate planning moves can be beneficial for everyone in a family, including the children who may continue to rely on their parents for decades.
