Although it can be unpleasant to think about how your family would manage if you or your spouse died, planning for this situation can protect your children and your assets in case the inevitable does occur. You can ensure that the family home and property will be available for your loved ones even after you are gone.
Learn more about how an estate plan can give you peace of mind by providing for your family.
Establishing a guardian
If you have minor children, you should draft a will that indicates who should have custody of your children if both parents die. Without this document in place, this decision will be at the discretion of the family court judge in your district. This can also cause rifts in the family if members disagree about who should raise your children.
The will should also establish an executor, a family member or friend who you trust to manage your estate. This person will be responsible for following your wishes when distributing your assets.
Providing financial support
Creating a trust for minor children can provide for their care and future education. A trustee manages this type of account and provides payments to your child’s guardian to pay for medical costs, food, housing, shelter, clothing and other needs. Life insurance policies can be payable to a trust in your children’s names.
You can also plan your estate to minimize the tax burden for future generations. For example, you can give your heirs up to $11.8 million that will be exempt from the inheritance tax.
A trust can also protect your assets from creditors and claims. Typically, trust-held assets do not need to go through the probate process, which can be costly and time-consuming.
Once you have an estate plan in place, you should revisit the documents every few years. Changes in circumstances such as birth, death and remarriage may result in the need to revise your estate plan.