Having a child is one of the most powerful motivators that inspire adults to finally sit down and create an estate plan. Parents worry about what might become of their children if anything were to happen to them and want to better ensure their safety.
Even those who have never thought about what might happen when they die before will need to consider the practical implications of their death or an emergency that leaves them unable to provide what their children need.
An estate plan can help to keep children out of state care
If a child’s parents die while they are still a minor, the state will often have a responsibility to meet the child’s needs. Children could end up in state care or foster placement. Sometimes, children may end up separated from their siblings or living with total strangers in a different school district, far from their established support network. Parents can choose a guardian name a guardian in their will who can assume legal responsibility for the children when they die and thereby keep the children out of foster care.
Estate plans can provide financial support as well
Raising a child to adulthood is expensive, and parents who die while their children are young will not be able to help pay for their college tuition or high school extracurricular activities. Many parents will add life insurance coverage to their personal portfolio as a way to support their children if they were to die in the near future. Others might create a trust as a way of setting aside assets for the children that the guardian won’t control if they die while the children are minors.
They can also provide stability during an incapacitating emergency
There are scenarios in which parents may not die but are still unable to take care of their children or meet the family’s financial needs. Thorough estate planning which includes incapacity planning can help ensure that the children have a stable daily life even if their parent ends up hospitalized for a lengthy period. Powers of attorney, advanced directives and other living documents can help ensure that the children’s needs and the household’s management requirements get met regardless of what happens to the parents in the family.
Becoming a new parent can be a good reason to start estate planning or to revisit an existing plan for the enhanced protection of one’s children. Seeking legal guidance is often a good place to start.
