Those who have just had children are often keenly aware of how their new family members are totally dependent on the adults in their lives. Infants and toddlers are incapable of meeting their own needs and require 24/7 support from adults just to stay alive. Older children may become more independent as they learn life skills and mature, but they will still need guidance and financial support even after they turn 18 and become legal adults.
Anyone with children in their family will typically benefit from putting together an estate plan that specifically seeks to protect their children. What can someone accomplish with an estate plan that aims to benefit their underage children?
Leaving resources for their support
With the exception of life insurance coverage, which transfers automatically to a beneficiary based on the paperwork filed with the company, any inheritance that someone wants to leave for their children will typically require an estate plan. Either a will or a trust is necessary to ensure the transfer of specific assets to the children. Although children do have a strong right of inheritance when someone dies without a will or estate plan, what assets they actually receive will be hard to predict if the final decisions about those resources are left to a probate judge.
Providing guidance and support for an emergency
Estate plans don’t just include wills and trusts to manage somebody’s property after their death. They can also include living documents that take effect during an emergency. Powers of attorney and advance directives can be very important forms of protection if there is a car crash, sudden medical incident or other emergency that leaves a parent incapacitated and unable to care for the children, communicate their medical wishes or handle household finances. Planning for an emergency helps ensure that the children have someone to care for them and manage the home when a parent is incapable of handling those jobs.
Naming a guardian
Typically, when one parent dies, the other assumes full responsibility for the children. However, there are scenarios in which both parents die while the children are still young or one parent has lost or given up their parental rights. Choosing the right person to serve as a guardian is one of the most important steps a parent can take to protect their children in an unpredictable world. A guardian will manage their resources and provide for their daily needs until they become adults, and therefore choosing the right person to fill that role will be very important for the children’s stability and well-being after the loss of a parent.
Understanding the needs of the children in the family can be a powerful motivator for those who are thinking about creating or updating an estate plan after growing their families.