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When formulating the terms of your estate plan, you must keep several vital components in mind. When you have children, you should consider the following items in your estate plan:
When you have minor children, arguably the most essential element of your estate plans is naming the party who you wish to take care of your children if you pass away.
If you do not already have these plans in place, you should include them as part of your estate plan. Otherwise, you could put your entire family at risk.
Setting up trusts may be in your best interest if you hope to pass on your assets to your children when you pass away. Here, your estate avoids probate..
Establishing revocable living trusts or irrevocable living trusts could help too. Revocable trusts can be changed, while irrevocable trusts cannot. If creditors attempted to come after your assets upon your passing, an irrevocable trust may shield your children’s inheritance from judgment.
Additionally, when setting up a trust, you can determine when and how your children receive certain types of assets. For instance, if you decide to set up a trust, you could choose whether your children receive payouts as teenagers, at 25, 30, or even older, as well as the purposes for which they may receive payouts.
Another key element to your estate plans should be obtaining a life insurance policy. You must ensure your children and your child’s legal guardian can maintain their standard of living even if you pass away. Many factors determine the types and amounts of life insurance coverage you should purchase.
You should consider how much your family would need in financial support, your current income, other assets you have, and other monthly living expenses. Your estate planning attorney can go over your life insurance policy goals with you to craft one that suits your family’s needs.
When you have young children, and your health declines or a traumatic illness leaves you incapacitated, you should give someone the authority to make critical medical decisions. You could assign one of your children to be an agent in your health care power of attorney form. This will allow them to give your consent to X-rays, certain medications, life-prolonging treatments, and other medical decisions.