What Parents Need to Know About Estate Planning
As a parent having a comprehensive estate plan is central to providing for your family’s security. While it may seem daunting, a well-designed estate plan can provide for the financial well-being and care of your children should you be unable to. This article focuses on what parents need to know about estate planning.
The starting point for every estate plan is a well-drafted last will and testament. As you set up your will you will need to nominate a guardian or guardians for your children. This guardian will step in and take care of all the needs of your children until they are adults. You will also nominate a successor guardian should your first be unwilling or unable to.
Choosing who will take care of your children if you pass away is a personal decision and should be considered thoughtfully. Your nominated guardian should be someone you trust and choosing one ensures that a court will not appoint one for you. It is important to note that you will still need to provide for your children financially.
A traditional will-based estate plan outlines how your assets will be handled and there are many decisions to review.
The most efficient way to avoid probate while providing for your children financially is setting up a revocable living trust. A revocable living trust will allocate your assets for your children and because it is revocable you can amend it at any time while you are alive. Upon your death, the trust will be irrevocable and control of the assets will be assumed by a successor trustee. This trustee should be a trusted individual and will be responsible for carrying out the guidelines of the trust which will include your children’s inheritance of property and assets until they reach adulthood.
An executor of your estate is the trusted and responsible individual you will choose to oversee the process of carrying out your will.
The final thing that parents need to know about estate planning is that you will want a power of attorney to take care of their personal and financial matters if you are unable to while you are living. A separate medical power of attorney will take care of health care decisions laid out in your living will. As always you will want to appoint individuals you trust.