Parents of minors have a lot to think about, but many neglect to consider what will happen if both parents pass away. While this isn’t easy to think about, it’s something that’s necessary so you can make plans.
Young parents must take the time to create an estate plan. This provides the information necessary to raise the children and handle your assets.
#1: Plan for your child’s care
Your child will need someone to care for them if both parents die. You can name the guardian in your estate plan. You may need to name a short-term guardian and a long-term one. The short-term person should live close to you so they can take the children until the long-term guardian can make it to them.
The guardian you choose should be mature enough to care for the children but young enough to keep up with them. They should also be able to raise them like you would raise them.
#2: Set the plan for your assets
Your assets can help the guardian to care for the children, but you have to pass these down in the right manner. Some assets, such as bank accounts, are covered by payable-on-death designations. Others need to be included in your will or placed in a trust.
Trusts are a good option for many people because there are different types. You can even set terms for how and when the trust can be distributed.
#3: Consider plans for incapacitation
It’s possible that you may become incapacitated at some point. Setting up advance directives and naming people to take care of your health care and financial decisions can take some of the stress off your loved ones during this time.
The power of attorney for medical care will make decisions about your health when the matter isn’t covered in the advanced directives. A financial power of attorney allows someone to make decision about your assets and other money matters.
Ensuring your estate plan meets your family’s needs is crucial. You’ll have to make decisions that are difficult, but working with someone familiar with these matters can take some of the stress out of the situation.