If you’re a parent of young children, you may be thinking more about sleep training and preschool than estate planning. If your kids are adults, you might assume that you still have plenty of time to get around to that. In fact, estate planning is important for parents at all stages of life.
1- Research Your State Laws
This should be your first step. The idea is not to replace the help of an attorney or to try to become an expert. Instead, you should focus on getting an overview of estate planning law where you live and make a list of questions to ask an attorney about later.
2- Choose a Guardian
If your kids are minors, choose someone to name as their guardian in case something happens to you. This might be a friend or a family member. Be sure to talk to the person you’re naming as the guardian first to make sure they are willing to take on the responsibility. You may want to name a backup guardian as well.
3- Talk to Your Kids
This is particularly important if you are the parents of adult children, but even if your kids are younger, you may want to have an age-appropriate conversation with them about what you might do with your assets. A conversation with your kids and any other affected family members gets everyone on the same page about your estate plan.
4- Visit a Lawyer
While there are DIY options out there, it’s easy to make mistakes or misunderstand some element of estate planning. The future security of your family is too important to try and cut costs in this way. A lawyer can explain your rights and responsibilities, answer any questions that you have, and help you prepare your estate plan correctly.
5- Make Lists
Lists are helpful in helping you remember everything you need to account for in your estate planning. For example, you may want a list of assets to be distributed. You may also want to make a list of passwords for any accounts that will need to be dealt with if you’re not around.
6- Trusts and Powers of Attorney
If your kids are minors, they can’t inherit your assets. Trusts can protect those assets until they are older. Keep in mind as well that young adults may not be great at managing money, so you might not want them to get their full inheritance at 18 either. You may want the money to remain in the trust. Consider carefully who you will appoint as a trustee to manage the trust and distributions. In addition, consider appointing people to have medical and financial power of attorney.
7- Prepare Documents
Work with an attorney to prepare estate planning documents. You can name a guardian for your kids in the will. Be sure to move assets into your trusts or use a pour-over will to do so. In addition, make sure your beneficiary designations are up to date.
As a parent, you want to make sure that your children will be taken care of no matter what happens to you. An estate plan is an important element of putting this assurance in place.
