3 Ways Parents Can Safeguard Their Children’s Futures
Here at GrandCare, we spend a lot of time talking about how to take care of your parents. But have you ever thought about how you, as a parent, should be looking out for your kids? Today, GrandCare welcomes guest blogger Jackie Waters of Hyper-tidy.com. Jackie’s mother-in-law passed away recently. Going through the probate process, initially she and her husband were overwhelmed. As they learned more, she realized that they should be doing much more planning to protect their own children. When they were through, Jackie wanted to help others in the same boat, who might not know where to start.
You want to protect your children from all the ills of the world. Unfortunately, you can’t be by their side every moment of every day, and you won’t be able to protect them from every mean-spirited classmate or difficult situation in life. What you can do is start putting plans in place that will set them up for a promising future, such as saving for college, making arrangements that seamlessly transfer your property to your children following your death, and creating a sound financial foundation that ensures your family will be taken care of for many years to come.
Many young couples don’t give much thought to estate planning, but when children enter the picture, it’s time to start thinking ahead. Legal documents such as wills and trusts serve to dictate what happens with your property and other assets upon your death. In the event of a terrible tragedy, you’d want to know that your children will be cared for, and putting these legal documents in place is the best way to ensure that your wishes are heeded.
A will is easy enough to set up on your own thanks to websites and legal software that streamline the process, but it’s a good idea to talk with an estate planning attorney to ensure the integrity and legality of your documents. Most, for instance, must be notarized, so simply filling out forms and signing them doesn’t necessarily mean that they’re legally binding. An attorney can advise you on the best way to structure your estate, recommending tools such as life estate deeds and other documents that can make the transition easier. They’ll be able to make sure you don’t go with a deed-type that isn’t ideal for your situation.
In addition to estate planning, parents should designate guardians to care for their children should they become unable to do so before a child reaches adulthood. The most difficult part of this process is determining who is best-suited to raise your children if you die or become incapacitated. You may prefer that your parents raise your children if you’re unable, but worry about their ages. In these cases, it’s possible to designate a guardian for a specified time frame, such as until your kids reach the age of 10, and then transfer guardianship to another trusted adult.
Regardless of whether your preferred guardian’s age is an issue, it’s a good idea to appoint at least one or two successor guardians as a contingency in the event that your first choice is unable to fulfill this duty. You can designate these same individuals as financial guardians or opt to have another person oversee your children’s finances.
The reality is that many families don’t have estates worth hundreds of thousands of dollars or more, making life insurance a crucial protection for parents of young children. Consider how much life insurance you’ll need by evaluating the sources of income your kids will have access to, such as survivors’ benefits through Social Security, proceeds from the sale of property you leave behind, and so forth, and then consider the amount that may be needed to provide the care they need throughout childhood and adolescence.
Depending on the age of your children, you may not want to designate your kids as beneficiaries on your life insurance policy. Instead, consider designating a trusted adult as the beneficiary who can oversee the use of the funds for your children’s needs. Or, if you have a living trust, you can designate the trust as the beneficiary, with your children designated as trustees. Once again, there are several ways to structure these arrangements to ensure that your assets and funds from insurance policies are safeguarded for your children, so it’s worth seeking the assistance of an estate planning professional.
Protecting your children’s futures is largely a legal endeavor with many financial considerations. Taking the time to consider your children’s needs and putting documents and plans in place to safeguard their well-being under any circumstances is the best gift you can give them.
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