It’s no surprise that parents of young families often don’t have any estate plan in place. It’s a busy time of life. Every day is filled with urgent requests for your attention. Still, having a plan doesn’t need to be hard or expensive.
There are a few questions young parents can consider before dismissing the idea of having an estate plan:
- Who will care for your children?
- Do you have life insurance?
- Do you have a trust?
- Who will manage the assets for your family?
- Who make health and financial decisions if you are seriously injured?
Northwestern Mutual provides helpful information on each of these questions. You can learn more here: Estate Planning for Young Families: 5 Questions Parents Need to Answer.
Some of those questions are obvious, but might say, “why do I need a trust?” Northwestern Mutual explains:
If you think that your child’s guardian would automatically be able to use inheritance money to care for your children then you’d likely be wrong. By default, the court — not the guardian — will control the inheritance before the child reaches the legal age of 18 or 21. If you’d like to avoid any confusion as to what your children inherit and when, a trust may be a good choice for you. Within a trust you can decide who will manage the money and decide when the children will receive trust assets and for what purposes.
In fact, a majority of our young family clients choose to set up a trust when they understand all the benefits a trust provides. A trust protects assets, avoids probate in court, and provides a long-term plan for the needs of children.
This article was written by attorney Aaron Hall.