Planning For Parents of Littles

For new parents, developing an estate plan can seem like a daunting task. How do you even begin to make sure that your little ones are taken care of if the unthinkable happens? The four special considerations below provide a great starting point for parents of young children who are ready to get planning:

1. Appoint a guardian in your will to take over caretaking responsibilities in the event that your child is left without a surviving parent. Although this is typically the hardest decision for parents to make, a court will choose an individual to take over if you do not select a guardian on your own.

2. Select a trusted individual or financial institution (a trustee) to handle your assets on behalf of your children if you pass away while they are still young. This could be the guardian you have appointed, or you may choose another individual to act as trustee if you prefer to keep caretaking and financial responsibilities separate. This person would management investments and the like and would distribute assets as needed to your children until they reach an age designated by you.

3. Choose an age or life event or achievement at which time you would like your children to receive your assets outright without the involvement of a trustee. Many parents prefer to withhold outright distribution of assets until children surpass college age, but distribution could also be contingent upon milestones such as graduation, marriage, or purchase of a home.

4. Check your listed beneficiaries on life insurance, retirement, and other types of accounts to make sure your primary and alternate beneficiaries are up to date. Any such beneficiaries will receive such assets directly upon your death, and these beneficiary designations will supersede gifts made in your will.

If you take some time to think through these four considerations, you are well on your way to making sure your children are taken care of by your estate plan.