You’ve just welcomed a new baby into the world, and days seem brighter and filled with hope and possibilities. This is the moment when you want to consider putting those hopes and possibilities into a lasting legal document. Estate planning is an uncomfortable topic that many avoid until it’s too late to make the appropriate preparations. No one wants to think about dying while bringing new life into the world but creating an estate plan can help loved ones know your exact wishes should you pass away suddenly.
3 Reasons Why Parents May Prefer an Estate Plan Over a Will
An estate plan is more than a will. It’s an assortment of legal documents. When compiled, they serve as the guidelines for everything from your asset distribution to the custody and care of your minor children. Parents with minor children can use estate plans to prevent the confusion and erosion of resources that could otherwise occur through court and state system regulations.
A will alone cannot adequately cover many of the issues that could develop for parents of minor children, like:
- Minor Children & Life Insurance: It is usually ill-advised to elect children as the beneficiaries of your life insurance policies. In fact, minor children cannot serve as the beneficiary of a life insurance policy. Resolving this error could cost funds meant for your child’s future. If you have a spouse selected as your primary beneficiary and a minor child as your secondary, that could still pose problems if both parents die simultaneously. An estate plan can include a trust for your minor children that can serve as the secondary beneficiary.
- Simultaneous Parental Death: If both parents die simultaneously and their children are minors, the execution of assets will be more complicated. Most married couples leave their spouse as the executor and beneficiary of all their assets. Without a plan in place for this unfortunate circumstance, minor children, your assets, and final wishes could be in jeopardy. An estate plan will allow for detailed planning to cover this situation.
- Guardianship & Power of Attorney: You want to ensure that your children have named guardians, and you have a custodian who will oversee their financial interests and needs until they reach the age of majority. Both parents should have the same guardian in their individual wills and in all associated documents to avoid confusion. Power of attorney is an important document that can protect your family and children if you and your spouse are incapacitated. It will detail who will care for your children and make your medical, legal, and financial decisions.
Palmer Rodak & Associates can help you develop an estate plan that clearly states your wishes for your minor children and their care. Don’t wait until it’s too late to prepare. Call us today at (760) 573-2223 to schedule a consultation.