If you are a parent to young children, it can be hard to imagine a world where you are not there to see them grow up. However, as a parent it is your job to do all that you can to protect their safety and happiness – now and in the future. No one is promised tomorrow; if something unexpected were to happen to you, what would your children’s future look like? If you can’t answer that question, it’s time to take proactive steps and begin building your estate plan.
In this blog, we’ll go over the basics of what an estate plan entails, as well as the 3 most important reasons to have one if you have a young family.
What Exactly Is An Estate Plan?
An estate plan entails more than one thing. At its core, an estate plan is a collection of legal documents and orders that direct what happens to your assets, property, and dependents following your death or incapacitation. Despite what the general population may think, estate plans are not just for the elderly or wealthy! Some of the most common components of an estate plan are:
A will – a document that lists your assets and property, as well as who you want to inherit them
A trust – a financial entity to which your assets are transferred to be controlled by a trustee
A power of attorney – a document that allows you to authorize a trusted individual to make legal decisions on your behalf
A health care proxy – a document that allows you to authorize a trusted individual to make medical and healthcare decisions on your behalf if you are unable to
An advance directive – orders to doctors and other healthcare workers which express your wishes for certain artificial forms of life support or life-saving measures
A guardianship designation – a document that allows you to name the person/s you wish to be your children’s guardian in the event of your death or incapacitation
Each person’s estate plan is unique to their goals and family dynamic. An experienced estate planning attorney will be the best source of guidance when it comes to deciding what should be included in your plan. Here are the 3 reasons why young families should consider working with an attorney to build their plan:
Reason #1: You Should Decide Who Will Be Your Children’s Guardian If Something Happens To You, Not The State.
Perhaps the strongest motivator for young families to begin planning their estate is the idea of meeting their untimely demise without any plan for their children. In Pennsylvania, parents may designate a guardian for their children in the event that something tragic occurs. It can be incredibly distressing to have to make a decision like that, but if you don’t, then a judge will. Aside from yourself, you know who would be the best parent for your children. Many people elect to name their children’s grandparents, aunts, uncles, or older siblings as guardians, but what works for one family may not work for another.
Once you have made your decision, you should share it with the individual you’ve chosen, and have a candid conversation with them in which you ask a few basic questions, including:
Are you willing to be a parent to my child/children?
Will you respect mine and my children’s religious beliefs and moral values?
Will you uphold my style of parenting?
Would you make my children change schools?
Are you in the right financial standing to be my children’s guardian?
Reason #2: You Can Secure Your Children’s Financial Future.
There are several ways that you can secure a comfortable financial future for your children. The most common way that young parents accomplish this is by taking out a life insurance policy. These funds can help your family deal with the extra expenses that may arise from the premature death of one or both parents. For example, things like your mortgage, your funeral costs, or your children’s school tuition could be paid for out of your life insurance to allow your children to continue the familiar routines they have established.
Another option for young parents looking to secure their child’s financial future is to set up a trust for them. As already covered, trusts are financial entities to which assets are transferred and then controlled by a third party – called a trustee. Your children will not be able to take control of any inheritance you leave them until they turn 18, so creating a trust can benefit them in many ways.
A trust allows you to have a say in how the money you leave behind is spent. You can designate a person to manage the trust on behalf of your children and name the terms for how the money can be spent. While no one would like to believe their loved ones would act irresponsibly with money that was meant for their children, a trust ensures that the money will only be spent in the way you meant for it to.
Reason #3: You Need A Trusted Individual Who Can Legally Make Decisions For You If You Are Unable To.
With a young family to consider, you need to have orders in place that designate the individuals who can legally make decisions for you. In the event something happens to you which prevents you from doing so yourself, your loved ones may need to obtain a court order to handle your affairs, which takes time and money. The better option is to take the time to give power of attorney to one or several individuals now, that way they can act on your behalf with no delay in a worst case scenario. Your agent will then be able to use your available resources to make sure your family’s bills are paid and other needs are met.
Daly Law Offices Is Passionate About Assisting Young Families In Protecting Their Future
At Daly Law Offices, we are dedicated to helping young families feel confident that their family’s future will be bright, even if something tragic and unexpected should occur. Don’t leave important decisions that directly impact your children and loved ones up to a court. Our lead attorney, Joshua N. Daly, can assist you in any of your estate planning needs, including guardianship designations, trusts, power of attorney, and more! Call today to schedule a free consultation and let us give you peace of mind that those you love most will be taken care of.