Growing families have numerous needs. Parents may need to consider tactics to increase overall household income. They may also need to look for a more expansive living space. Beyond that, parents in the family probably need to talk about effective means of protecting their children as they grow.
An estate plan can play a very important role in the protection of children and a growing family. Adults who have just discovered they are about to have a child or otherwise add to their existing family may need to start the estate planning process or may need to revisit the documents that they already have.
Addressing financial support needs
The first concern many people have when thinking about the possibility of dying with a family is how the family may struggle without their income. Especially if the other parent has de-prioritized their career or ceased working entirely, the death of one parent could lead to financial devastation to the entire family.
Parents may need to review how much life insurance they carry and who they have selected as beneficiaries. Increasing the amount of coverage is sometimes necessary for the adequate protection of young children. A parent may need to think about a decade or more of childhood expenses and the balance due on their mortgage. Even student loans may require consideration when people adjust how much life insurance they carry.
Choosing a responsible guardian
Ideally, a tragedy only directly affects one member of a family. In reality, both parents could be in a car crash at the same time. To ensure the proper support of minor children, parents need to name a guardian to care for their children if they become incapable of doing so. Selecting a guardian can be a difficult process, in part because not everyone agrees to accept that kind of responsibility. The more children there are in the family and the more extensive their needs are, the greater the challenge involved in selecting the right guardian.
Preserving resources for the children
Life insurance to cover certain expenses is useful, but parents still need to think about the preservation of their other assets. Many adults with minor children use trusts as a way to protect resources from the possibility of a guardian or a surviving parent misusing a child’s inheritance. Choosing someone other than the guardian who may care for the children as the trustee could help ensure that there are resources to support the children for years to come.
The bigger a family becomes, the more intricate estate plans need to be. Creating and revising estate planning documents is an important step for those expecting a new family member.
