A surprising number of new parents don’t think of estate planning as a crucial step when preparing to welcome a baby to the family. However, the typical family does benefit from having written protections in place for minor children still dependent on their parents.
If anything were to happen to you and the other parent at the same time, like a car crash, your children could be left without protection. It is only through careful advance planning that parents can protect their children from poverty and unfortunate experiences if something unexpected happens while the children are still young.
How does an estate plan help protect vulnerable kids?
It keeps them out of foster care
Especially if you have a large family, you could fall into the dangerous trap of assuming that there will be someone willing to take care of your child if something happens to you. You may think that naming a guardian isn’t necessary because your family will sort out the best place for your children to go when you die.
What you may not realize is that while the state does give preferential treatment to family members when children need placement, your kids could easily end up in foster care if something happens to you. If you don’t have a guardian listed in your will and there are no other legal documents transferring authority to someone by name, your family members may have to complete background checks and special training before the state will place your children with them.
Your plan helps provide them with support
Do you have enough life insurance to help cover your children’s basic expenses for the next few years or contribute to their college funds? Parents need to perform an honest assessment of their financial circumstances and determine what they might be able to leave for their children when they die.
Ensuring that you have enough life insurance to support your children and that your property will pass to the right individuals when you die can go a long way toward protecting your children.
You can help prevent financial abuse
Naming your children as the beneficiaries of your life insurance or your major assets in your estate plan may not be the best solution. Even people that you trust could become abusive or manipulative in the hopes of gaining control over those assets. Some parents prefer to put the inheritance for their children in a trust so that there is more accountability for the use of those assets and less risk of people mistreating their children.
If you take the time to plan now for a rare but dangerous situation, your children will have adequate protection when the unimaginable happens. Engaging in proper estate planning now will give you peace of mind for the rest of your life and protect your loved ones when your life ends.