Most young families don’t do estate planning. They believe that since they are young and healthy they don’t need to. Or, they think they can’t affording it.
Unfortunately, illness and death can strike the young as well as the old. While it is less common for a young person to have such a tragedy, it can happen. How would this affect your family? Your spouse? Your young children?
Estate planning does not have to be expensive. The young family can start with basic estate planning documents: Wills, Durable Power of Attorneys and Patient Advocate Designations. It is a good time to look at affordable term insurance. As your family situation and wealth change, you can update and/or upgrade your estate plan to meet your needs.
What you will need to consider:
- Who will be your Personal Representative (Executor)? This individual will be responsible for handling all of your final financial affairs. He or she should be trustworthy, capable and willing to take on this responsibility. Also, if you are naming your spouse, you need a back-up person. We travel together and the same accident could affect both of you.
- Who will be the Guardian for your Children? This is the most difficult question that parents confront and what often prevents them from finishing an estate plan. If you don’t appoint someone, the Court would be forced to do it in your absence, without your input and without knowing much about your life or your children.
- How should your assets be distributed and/or used? If your spouse survives, this is not an issue; however, if both parents die, the children need to be provided for.
- Who would be the Conservator for the Children? While the Guardian is the individual who raise the children, someone needs to manage the assets for them. This might not be the same individual. It must be someone who is financially savvy and willing to do this for a number of years.
- Do you need insurance? Do you have life insurance through your employer(s)? Would it be enough? If one parent is a “stay-at-home” parent, insurance is definitely needed. While there is no salary to replace, there will be significant costs to take over his or her responsibilities.
If you are a young family, with children, it is important to plan for the “what if”. A basic estate plan can set your mind at ease by setting up the financial framework and individuals to care for your family if you are not there.