do I really need to? estate planning advice for parents
Right now, I’m reading the book Signs of Life: A Memoir by Natalie Taylor. Like any story, it’s events start with a life changing action. In this particular story, 24-year-old Natalie’s husband dies suddenly. And she’s 5 months pregnant.
Which made me think: if the unthinkable, unspeakable happened — would our family be prepared?
Estate planning is nothing anyone wants to think about, especially when you’re 30ish. I’ve heard it countless times: estate planning is for ‘old people.’ But it should be something we all tackle. As parents, we are responsible for the nurturing and well being of our children. So if the unthinkable, unspeakable happened, you want to ensure your child continues to be nurtured… not thinking about it doesn’t mean it won’t happen.
Luckily, there are a few lawyers in my family. And the one who happens to be an expert on estate planning, just happens to be my mom. Here’s the advice she gave me to share with you:
- Meet with an attorney. You may have seen commercials for do-it-yourself wills on television, but these one-size-fits-all documents don’t necessarily speak to your situation. Trust document drafting to a respected legal professional.
- There are three documents you need to put into place. You’ll want to create a will, financial power of attorney and health care advance directive. Most people have seen the movies and know what a will is. You may or may not be familiar with Financial Power of Attorney, which indicates who can handle your financial affairs if you become disabled or incapacitated, or a Health Care Advance Directive, which specifies who can make health care decisions on your behalf in the same situation.
- Consider a guardian. If both parents are gone, who will care for your child? This is a tough one, mostly because no one wants to think about anyone other than themselves raising their child. But what happens if you haven’t indicated a guardian? The worst case scenario involves a lot of legal battles and/or child services. Consider similar parenting philosophies and select a person who would be willing to take on that very important responsibility. Be sure to talk with that person, too, before executing a legal document. Life isn’t a movie … no surprises like in “Life As We Know It…“
- Look at your family finances. Sometimes weeding through the finances can be ugly (we spent how much at Target last month?), but knowing just how much money would be needed to pay off your mortgage and put your child through college is a good place to start when considering how much life insurance you’d need. Talk with a financial planner and implement a savings strategy.
- Trust Planning: A trust allows you to put your money into an account that can be managed by a trusted person to benefit your children so that it can only be used for them. If you set up a trust for your child, you need to think about how old that child should be when he or she has access to the money. Some parents think 27 is better age for access than 21.
These are tough decisions, but the alternative — in my opinion — is way tougher. Guess what Pat and I will be talking about this weekend? How about you?
During the fifth month of her pregnancy of her first child Natalie Taylor is devastated by the sudden death of her husband. Her journey with grief is chronicled in the memoir Signs of Life. Join From Left to Write on March 29 as we discuss Signs of Life by Natalie Taylor. As a member of From Left to Write, I received a copy of the book. All opinions are my own.