There’s a lot that you can, and should, do to make sure that your family is financially safe, including steps to take in your lifetime to avoid falling into hard times. However, you may also be thinking about the far future, and what happens when you might be gone. This can be especially important in the case that you have children who may have additional needs and require a little extra care. As such, here are some of the steps you should consider taking.
Create A Will Or Trust
The cornerstone of any plan to protect your children’s financial future, the will or legally binding trust determines who gets what. While, in most cases, children and spouses are set to inherit, the process of working it out can be lengthy and stressful, so a will allows you to make things a lot more clear-cut. Aside from allocating your assets, it can also help you name guardians and outline any specific wishes to make sure that any plans you have for the care of your children are put in place. Trusts can be vital for younger children, too, as they set rules for how and when children receive money, protecting immature heirs from managing large sums too early.
Setting Up Your Deeds
For most people, real estate is the most important and valuable asset they can pass down. If you want your children to have a roof over their heads, without any delays, then you can set up deeds to do just that, such as a beneficiary deed or a transfer-on-death deed. It’s important to get to know the specific rules for your state, as they can change depending on where you are based. However, there typically are ways to skip probate when it comes ot real estate. However, you should avoid adding a child to your deed during life, as it can trigger gift taxes or create legal complications if they face debt or divorce. Help with an estate planning attorney can help you avoid any unexpected consequences like that.
Set Up Life Insurance
A lot of people think that life insurance is just there to help cover the costs of a funeral and all of the immediate financial burden following their death. However, it can be a crucial financial cushion for the long term as well. It is an affordable means to start preparing the necessary funds to help cover your children’s education, housing, and basic living costs for some time after your death. Name a trusted adult or a trust as the beneficiary if your children are minors, since they can’t legally manage large sums of money. You can also set up the policy to fund a trust, ensuring the funds are managed according to your rules. Make sure that your policy is structured to take care of your kids in the long term, not just their immediate needs.
Not many of us like to think about what happens after we’re gone, or the struggles our family may have without us. However, it’s important to consider that the steps above can make things significantly easier.
