Children make life both interesting and complicated in a number of ways. If you have children, chances are you work hard to ensure that their future is secured. One way of realizing this is through your estate plan.
Done right, an estate plan can safeguard your legacy and ensure that your loved ones’ needs are taken care of when you are incapacitated or deceased. But, how do you create an estate plan if you have young children?
Here are a few questions that can guide you through this process.
Who will care for your young children if you’re not there?
Naming a guardian in your will is an important consideration when creating an estate plan with young children in mind. While identifying a guardian for your children, consider your potential guardian’s values and belief systems, age and financial situation, among other considerations. Once you have a potential guardian in mind, be sure to discuss your desires with them before including them in your estate plan.
How will your assets be transferred to the children?
If you pass on intestate, your child would be entitled to their share of your estate. However, this asset would be held in a minor account that would only be accessible to the guardian. And once the child becomes an adult, all assets in their name will be handed over to them regardless of their ability to manage it.
You can avoid the uncertainty that comes with this by setting up a trust and dictating within the trust instrument how you would wish for the money therein to be released to the child. For instance, the trust instrument can specify that the child will receive a certain percentage of the inheritance upon attaining specific milestones in life such as graduating from high school, college or getting married.
An estate plan is a living document that articulates your wishes with respect to your assets and loved ones when you are no longer around to make important decisions. Find out how a properly-written estate plan can help protect your young children.