FOUR ESTATE PLANNING DOCUMENTS EVERY PARENT SHOULD HAVE IN PLACE
Ensuring your child's safety is likely one of your top priorities. Here are a few important practical estate planning items that parents should consider implementing now to ensure their children will be taken care of in the event something happens to the parents.
NAMING A GUARDIAN/WILLThis is one of the most crucial estate planning tools for new parents or soon-to-be parents. Estate planning allows parents to legally name a guardian for their children. If you do not put your selection in writing, the state will name the guardian for your children. A guardian is the person that will raise your children in the event of your death. This is one of the most important decisions a parent can make to look after their children.
LIFE INSURANCEEven a basic term life insurance policy can provide support for a new child if a parent should pass away unexpectedly. If the child is older, it can provide much-needed money for college tuition or for basic living expenses that may have been covered by the parent.
REVOCABLE TRUSTA trust allows you to control the amount of money that is distributed to your children when he or she reaches the age of majority. You can also dictate at what age your children should receive all or portions of the estate. Additionally a trust can create asset protection for your children by shielding the assets in the trust from your children's creditors, spouses, and bankruptcy trustees.
POWER OF ATTORNEYA power of attorney designates a trusted person to handle your financial affairs if you become incapacitated. For example, if you were in a car accident and as a result, slid into a coma, a power of attorney would allow a trusted family member or friend to pay your mortgage and other expenses from your account so that your children would be take care of during your incapacity.