Planning for Young Families
Estate planning always seems like something you can do another day. When you’re young and healthy, the thought of planning for your eventual passing seems unnecessary.
The reality is, though, that problems and accidents can happen at any time. Without a plan in place, your children’s future will be decided by the court, and their inheritance will be managed by a custodian that you did not get to choose.
At Brady Cobin Law Group, PLLC, our dedicated Raleigh estate planning attorneys are committed to helping families at every stage of their lives.
With more than 35 years of experience in estate law, we know how to help young families make plans to protect their children and their legacy in case the worst happens. When you plan for your estate, you are planning to protect your family’s future. Contact us today to learn more.
What Young Families Need to Know About Estate Planning
When you’re starting a family, or you have young children, an estate plan is critical for their health and well-being. Sudden death or serious accident in the family can leave your children in limbo without the resources they need to thrive. An estate plan for married or unmarried couples will help protect them when they’re most vulnerable.
A successful estate plan for a young family will include the following pieces:
- Will: Many young people don’t have wills in place, but they are an important tool for protecting young families. A will is an official document that tells others how your estate should be divided, who should manage the process, and what happens if there’s a conflict. It also can name people who should be guardians of your children if you pass away. It’s an essential piece of estate planning and worth getting into place as soon as possible. If there is no will in place when a parent dies, the parent’s estate is divided according to North Carolina law. It can be a confusing and time-consuming process that can drain the assets your children could use. It’s easy to put a basic will in place, and there are many other tools available to help protect your family. Don’t wait to talk to an experienced Raleigh estate planning attorney about your options. The well-being of your family could depend on it.
- Guardianship: No one likes to contemplate what would happen to their children if they passed away. Unfortunately, parents who don’t make guardianship plans run the risk of leaving their children in an uncertain situation. If no guardian is named in a will, a court may appoint guardians for the children. This can leave children under the guardianship of someone who is ill-equipped to care for them. This is why it’s so important to have an estate plan in place. As part of estate planning, parents can designate who should be the guardians of their children. This allows parents to notify potential guardians and put plans in place for the care and upbringing of the children.
- Medical Directives and Power of Attorney: If you’re seriously injured, it may be impossible for you to communicate your wishes. Medical directives and power of attorney can help you to make your wishes known. If you’re incapacitated, these documents will give clear instructions and empower others to make important decisions about your health and finances. They can help prevent family conflicts, uncertainty about treatment, and can help your spouse access personal accounts he or she may need to care for you and your children. Many parents with young families assume that these documents won’t be needed for a long time, if ever. The truth is that an accident and incapacitation can strike at any time and leave behind chaos and confusion. A medical directive will help ensure you get the care you want, and a power of attorney will help your spouse make important decisions about you and your children’s future.
- Life Insurance: Life insurance is a way to ensure that your family will receive the resources they need if you pass away. Life insurance can help fill in income gaps or provide resources that a surviving parent or guardian would need for child care. Life insurance is very flexible, and you can typically find a policy that will support your goals. Types of life insurance coverage include whole life, universal life, variable life, term life, and many others. Whole life insurance, universal life, and variable life focus on investment of premiums and may have fixed or variable returns. Term life insurance is not investment-based and will provide a payout when the policyholder passes away. The type of life insurance you’ll need depends upon many factors such as cost, risk, and other investments. The amount of life insurance you’ll need to plan for depends upon available assets, family support, and projected costs. An inventory of assets and projections for future needs can help you decide on the amount of life insurance you need.
- Trusts: One clear rule in estate planning for young families with minor children is the need for a trust. Children are legally incapable of inheriting assets outright. Without a trust, any inheritance left to a child will be held by a custodian under the supervision of the court. The custodian will be required to file a bond with the court, will act under the court’s supervision, and as such, the custodian will be required to file an annual accounting with the court. The court, bond, and legal fees for these proceedings would be paid out of the children’s inheritance.
Additionally, when the children turn 18, any leftover money from the guardianship is transferred to the child outright. If you’ve done the proper planning and purchased adequate life insurance to assist in “finishing the job” of raising your children, this could be a sizable sum for someone 18 years old to have unfettered access to.
If you set up a trust for your children, there’s no need for court supervision, or a bond, or attorney’s fees in navigating the court. The trust can contain instructions that the money should be used for its intended purpose — providing for the rearing of your children, including paying for their education, health care expenses, and other types of support.
In addition to providing terms for how the money should be spent, you can leave instructions for when the children receive the money outright. This may be done in stages based on age or certain milestones (such as graduating college).
You can also choose a responsible person to manage the trust until your children come of age.
Our Attorneys Can Help You Plan for Your Family’s Future
Don’t leave your family’s future in the hands of the court if something unexpected happens to you. Talk to the experienced Raleigh estate planning attorneys at Brady Cobin today about how you can protect your children and your legacy. Call or contact our law firm online to set up a consultation.
Remarkably comfortable and through experience while dealing with some not so comfortable topics. Very well versed and made every step extremely easy. Have already recommended Andrew Cobin to all of our friends.