Estate Planning for Parents of Young Children

Estate Planning for Parents of Young Children

Nobody knows what tomorrow will bring and parents of young children should especially be cognizant of that fact. If something were to happen to you or your spouse, there are certain documents that should already be in place to protect your children and the assets they'll inherit.

Life Insurance

This may seem like a no-brainer but the fact is, many people have little or no life insurance. And while the cost of a new policy might seem unnecessary, the costs your heirs will have to face without one are considerably greater.

Life insurance can help pay any estate or income taxes that might be due, cover funeral expenses, pay off debt and also help fund a trust for your children's future.

Guardian and Conservator

There are two things you'll need someone else to manage on your behalf: your children's well-being and the assets they'll inherit. A guardian takes care of the day-to-day care, such as deciding where your children will live and go to school. The guardian will also have the ability to make medical decisions on the children's behalf and be responsible for their upbringing.

A conservator on the other hand, is responsible for handling the assets of the children until they reach legal age. This person manages the money you've left for your minor children. They will ensure the investments are performing adequately or they can be charged with doling out sums of money for specific accomplishments or life events.

You can give both responsibilities to the same person if you choose, just be sure that this is your intention.

Will or Trust?

While a Will is definitely better than nothing, a trust gives you a few more options when planning for minor children. With a trust, you can not only designate a guardian and conservator for your kids, but you can also structure the trust to provide for their well-being while they're growing up and then continue to provide incentives later in life. A trust also keeps the estate out of probate, so you don't have to worry about those added expenses.

To find out how to best protect your minor children, call our offices today.

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