Why Every Parent Needs an Estate Plan
When you have a child, your priorities change, becoming oriented around caring and providing for your child and family. While it’s an unpleasant thought, you have an obligation as a parent to consider how your child will be cared for in the event that you face serious injury or illness that could take you before your time. By creating an estate plan, you’re providing the best possible outcome for your child(ren) when you’re no longer physically able to care for them. Read on to learn why every parent needs an estate plan.
An estate plan allows you to select a guardian
Most importantly for any parent, creating an estate plan lets you designate someone to serve as your child’s guardian should you and your co-parent pass away or otherwise become unable to care for your child. When selecting a guardian, it is imperative to choose someone who shares your parenting philosophies and who will raise your children the way you want them to be raised. This could be a family member or friend. If you don’t nominate a guardian via your estate plan, the court will decide who looks after your child. This is not an ideal solution, as you are in a much better position than a judge to know what is in your child’s best interest.
Once you’ve selected who you want to serve as your guardian, you will want to speak with them to gauge their ability and desire to act as a guardian, and to prepare them for this possibility.
You can state your preferences for how your medical care should be handled with an estate plan
When creating an estate plan, you’ll have an opportunity to create a living will, also known as a health care directive or advanced directive. This document allows you to explain what sort of care you would like to receive when you’re incapable of speaking for yourself, including what sorts of life-saving measures you would or would not want used. You can also designate someone to make these health care decisions on your behalf through a durable power of attorney for health care. A power of attorney can also be used to designate an individual to make financial or other legal decisions on your behalf while you are incapable of making them yourself.
An estate plan lets you create a trust for your child
A basic will gives you the chance to allocate your assets to your child through straightforward gifts. However, you may want to consider the added benefits provided by creating a trust for your child. Trusts allow you to place restrictions on when assets are distributed, what conditions must be met before benefits are paid, and how they’re to be used. A trust also allows you to ensure the money left for your child is properly managed and to protect your child from having full access to their inheritance once they turn 18.