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Having an estate plan is critical for everyone, but especially for families with minor children if a medical emergency results in incapacitation or death. While it’s difficult to think about what happens to your children if you die, ensuring enough money is available for their needs is necessary for them to flourish. Estate planning can protect your family, name your children’s guardians, and explain how you want your assets distributed.
A caring.com 2023 survey reports two out of three Americans have no estate planning documents. Post-pandemic economic conditions are increasing the need for financial planning, including end-of-life and estate planning. Combining financial goals with estate planning objectives provides for your loved ones and creates a foundation for multigeneration wealth.
Your will is where you can name a guardian for your minor children. Waiting until a medical diagnosis or health concern to make a will is risky. If you are seriously injured or ill and can’t communicate, it’s too late. Health concerns may also raise issues about your decision-making abilities. Identifying a guardian for your children takes thought, time, and some negotiation with the person who will commit to raising your children should the need arise.
A will is the most common type of estate planning document and can address several other things, such as distributing money and property to loved ones and paying debts. For some people, a will may be all that is required to address what happens after their death.
However, some require additional estate planning documents, like a trust, for greater control and preservation of assets before and after death. Trusts and powers of attorney are especially important for families with children or adults with disabilities, as well as aging parents in need of long-term care. They are particularly important for families with significant estates or loved ones who are prone to miscommunication and disputes. The sooner you begin your estate planning, the better the outcome.
The Estate Planning Process
Estate planning doesn’t have to be overwhelming, but it can be complex. There are some simple steps to get started, including:
Gathering financial and other relevant documents
Even if some of your paperwork is stored online, print a summary copy. Having the documents in front of you provides a bigger picture of what to address today and plan for tomorrow. You may notice gaps in your approach.
Making a will
This legal document outlines how you want your assets distributed after your death, names guardians for your children, specifies how to divide assets among heirs, and names a personal representative or executor.
Retirement accounts, life insurance policies, and other financial accounts have beneficiary options allowing you to pass assets directly to the named beneficiary. These designations will override any instructions in your will, so keeping them current is important.
Considering a trust
A trust can provide additional protection for your assets and help avoid probate. A trust may be a good option if you have significant assets or a complex family situation.
Creating advance directives
Also known as health care directives, a living will explains your end-of-life wishes for care and treatment, and a health care power of attorney names a trusted person to make medical decisions in the event of incapacitation.
Naming a durable power of financial attorney
This individual can manage your financial affairs if you can’t.
Reviewing and updating your plan
Your estate plan needs periodic review and regular updates to reflect changes in your family situation, assets, and laws.
Seeking professional help
Working with an experienced estate planning attorney can help ensure your plan is comprehensive and tailored to your needs.
Estate Planning Barriers
You might have plenty of time to implement your estate plan, or you might not. We never know when accidents or illnesses may strike. Putting off your estate planning leaves your partner and children at risk.
A 2023 caring.com survey found forty-two percent of people say procrastination is the main reason they don’t have a will or other estate planning documents.
A young family needs to work their way toward financial stability and find ways to protect it. Even if you don’t have significant assets, you can make valuable decisions, such as taking out a life insurance policy to benefit your spouse and children. Young, healthy parents can get term life insurance at reasonable rates.
An estate planning attorney can help you select the most effective life insurance policy. In some cases, they may recommend an irrevocable life insurance trust. A life insurance trust permits life insurance policy proceeds to pour directly into the trust, becoming immediately available to your beneficiary.
How Can an Estate Planning Attorney Help Young Families?
Estate planning attorneys help assess your family’s unique needs and circumstances, creating a customized estate plan addressing your specific goals and concerns. Their experience can help identify potential risks and provide recommendations to minimize them, ensuring all documents complement each other and are legally correct.
Accurately drafting important legal documents, such as your will, trusts, powers of attorney, guardianship, and advance healthcare directives is critical. An estate planning lawyer can ensure these documents are legally binding for the state where you live and accurately reflect your wishes.
For young families, it’s crucial to receive legal advice in areas such as tax planning, asset management, asset protection, and, if appropriate, business succession planning. An estate planning attorney can help you understand the legal implications of your decisions so that you make informed choices.
Your attorney can also plan to routinely review and update your documents with you to reflect changes in your family, finances, or laws. And, in the event of your death, an estate planning attorney can help your family navigate the probate or trust administration process and settle your estate according to your wishes.
It’s in the best interest of a young family to seek the valuable guidance and support of an estate planning attorney to help to navigate simple and complex estate planning needs.