Many young families put off estate planning and often say that they are too young, healthy or can’t afford it. But even a healthy, young adult can be taken suddenly by an accident or illness, and those with young families need estate planning precisely because others are depending on them.
Getting married and having your first child is an exciting time, but it also requires some very important decisions to be made. Considering issues such as death and disability may seem far removed, but proactive planning allows you peace of mind.
A good estate plan for a young family will include naming someone to administer the estate (a trustee or executor), naming a guardian to care for minor children, providing instructions for the distribution of your assets, and naming someone to manage the inheritance for the children until they become adults. It will also include reviewing your insurance needs and planning for disability.
We’ve prepared a list of 4 key decisions you need to think about when planning as a young family:
- Choose an executor or trustee, and successors in case the first person name predeceases you or becomes incapacitated. Selecting a competent and trusted executor is critical to ensure that your last wishes are carried out.
- Choose a guardian for your child(ren). This person will become the legal guardian (as long as the court approves it as in the best interests) should both parents die or become incapacitated. You should consult with the person to ensure they would be willing to take on such a huge responsibility and choose someone with all the resources necessary to provide the lifestyle you would want for your child in this situation. Also designate either this person or someone else to manage the inheritance your child receives. To avoid any confusion as to what your children inherit and when, a trust may be a good choice for you. Within a trust you can decide who will manage the money and decide when the children will receive trust assets and for what purposes.
- Review your life insurance policies. Make sure you have a policy in place that is adequate to cover funeral costs, debts and replacement of your income.
- Consider the consequences of you becoming disabled and make sure you have a Power of Attorney to cover your financial affairs and a Health Care Power of Attorney to deal with your medical and health issues. Review your disability insurance policies to make sure the income replacement is sufficient for your family’s needs.
As a young family, you can probably think of a million things you’d rather do than tackle the difficult questions that surround estate planning, but think about the alternative: the court making the decisions for you. Once your plan is in place, it’s a good idea to review and update on a regular basis and especially when major life events or financial changes occur.
Contact the attorneys at Sinclair Prosser Gasior to discuss your estate planning needs today.