Thinking about dying before your children grow up is not necessarily pleasant. However, as a new parent, you need to create an estate plan to protect your children in the event you and your spouse die unexpectedly.
When planning for a future you are not a part of, it helps to understand what you can and cannot do in your will. Creating a comprehensive plan to account for every possibility and care for your children takes consideration and choices involving those you want to care for them.
Choosing a legal guardian
If both parents die without a will, your children will wind up in state custody to decide who gets them. Instead of putting them through that, choose a guardian in your will. Someone may spring to mind immediately, but if it does not happen, consider the following:
- Will this person honor your wishes?
- What is the current relationship between him or her and your children?
- Does this person share the same values as you do?
You should speak to the person you select to ensure he or she is up to the task.
Choosing a financial guardian
The money you leave in your estate should go to your children’s care. In some cases, the person you choose as a legal guardian may not want to deal with the financial side of things. You may decide to have a second guardian to administer the financial side of things. This person should prove trustworthy and handle money well. You may also use fiduciary tools, such as a trust account, to create a structured financial plan.
Your children are the most important people in your life. Creating an estate plan sets them up for success in the event of your death.