If you have children and have not yet started working on an estate plan, now may be a good time to do so. Estate planning can protect your children in a worst-case scenario, such as if you and your spouse are killed or die at the same time.
There are many ways in which estate planning can help under these awful circumstances.
Helping use life insurance correctly
To start with, the estate plan could dictate how life insurance is spent by sending it to a trust that is managed by a professional. For instance, if you have two young children and have a life insurance policy for $500,000, you might want to have $250,000 go to each child’s separate trust. Then, over time, the trusts could pay out to the children. You might opt to have everything pay out at 18, once your children finish college or at other times.
Working out guardianship issues
One of the more pressing matters after a parent dies is figuring out who will take care of their children. When only one parent dies, the other may take over, but what about when both do?
You’ll need to set up a guardianship to make sure your children go to the right home. Talk to the people in your family to figure out who would be able to provide for them if you pass away. Would an aunt or uncle be willing to take them in? Would you leave them with a family member? What about a friend?
Add backup guardians to your estate plan, too, because if someone backs out, you want to know that your children will be cared for and won’t go into foster care.
These and other issues can be addressed in your estate plan
While it’s unlikely that the worst-case scenario will happen to your family, it is always a good idea to be prepared for what could happen. It’s possible to set up your estate plan to protect your children and make sure they still have a good life even if you’re gone and unable to provide for them on your own.