When you become a parent, the way in which you handle your finances will likely change drastically. With children to think about, your priorities shift, including how you will be spending and saving you money. Your child will now become your first priority, which in turn will make having financial wellness even more important to ensure that they are cared for no matter what may happen.
Here at Trust and Will, we know how vital it is to develop financial wellness as a parent. We also know that between all of your daily responsibilities it can be hard to also find time to research how best to handle your financial wellness. Estate Planning is a large part of ensuring you have financial wellness. That is why we have put together a list of tips for you to follow regarding financial wellness and your Estate Plan to help set you up for success and allow you to rest with ease knowing your children and affairs will be taken care of no matter the circumstances.
1. Keep Beneficiaries Up to Date
Life comes with many unexpected challenges and in unfortunate circumstances, you may find yourself passing away at an age much younger than expected. This thought can be especially worrisome for parents. Worrying and wondering about the challenges that may occur if you should leave your spouse alone to care for the children, or in even more unfortunate circumstances, what would happen if you both were to suddenly pass away, can keep parents up at night. Circumstances like these, underscore the need for parents to establish financial wellness for their family, and to keep guardianship documents and appointed beneficiaries up-to-date on all accounts.
A beneficiary is someone who will receive money or other assets from you in the event that you pass away. It is important to name beneficiaries on accounts such as life insurance, 401k accounts, retirement accounts, and more. You will want to ensure that your family will have access to this money, especially life insurance policies so that your family is able to have financial wellness and be provided for in your absence. This will help keep those creeping fears of your children being left without you - at ease, as you will know you have an Estate Plan in place.
2. Appoint a Power of Attorney
An added layer of protection for unpredictable circumstances is a Power of Attorney, which is someone who becomes in charge of your bank accounts, business, and more in the event that you cannot do so yourself. This includes situations where you could find yourself in a coma or other health-related event that leaves you incapable of being able to handle your assets yourself. If such circumstances should occur, your Power of Attorney will step in to make sure all of your affairs are taken care of. As a parent, it will be important as well that you have someone in place who will make sure your finances are used to take care of your children’s needs.
Choosing a Power of Attorney in advance is beneficial for cases where both you and your partner find yourself in a situation where you cannot care for your children. Because you are able to choose your Power of Attorney—whether that be a friend, family member, or a hired professional—you can ensure that whoever is in charge of your assets is someone that you trust to handle them in the way that you would want them handled.
3. Create a Trust
Often when children receive an inheritance as minors, they are not able to have direct access to the finances/assets that they have inherited. As a parent, this can be a big concern as you want to ensure that your children will have access to the funds that they need. In events like this, the court will appoint someone to be in charge of the assets for your children until they reach legal age. However, they may not always use the funds in the exact way that you would. This will also be an expensive process to go through. One way to avoid this situation is to create a Trust where you give ownership of certain assets to someone you trust to allocate them properly. By doing this, you can appoint a chosen temporary Trustee to be in charge of certain assets until your children reach adulthood and can become sole owners of their inheritance. This will allow your children to have financial wellness even in your absence.
4. Create Nomination of Guardian Documents
For parents of minor children, it is crucial that you create Nomination of Guardian documents for the financial wellness of your children. Nomination of Guardian documents are legally binding documents that allow you to appoint someone to have guardianship of your children in the event that you and your spouse pass away or find yourself in a position where you can no longer be the guardian of your children.
Easy, online access to Nomination of Guardian documents means you can download the necessary documents today to be sure your children have the legal and financial protection they need. These documents are very important not only for the financial wellness of your minor children, but also for their protection. Nomination of Guardian documents give you the opportunity to choose a trusted individual to care for your child and not worry quite as much about what will happen to your child in your absence. Nomination of Guardian documents help ensure your children will have financial wellness even after your death, and be cared for no matter the circumstances.
As a parent, your lives are often hectic, between working, completing daily chores around the house, and caring for your children. You do not need the added weight on your shoulders that comes with worrying about the financial wellness of you and your children. Trust and Will is dedicated to trying to lighten your load in any way that we can. With our trusted online Estate Planning services, it is easier than ever to plan for your future amidst your already busy daily schedule. With Trust and Will, you can create your Will or a Trust from the comfort of your own home. We also offer a free online quiz to get you started if you are not sure where to begin. Worried you may need additional help? We have you covered as we also have Estate Planning Attorney Support.
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