As a parent who is working on your estate plan, there is one thing that you need to consider above all else: how to protect your children. There are estate planning tools that will help you protect your kids if you are suddenly incapacitated or pass away, and those will make sure that they are cared for and supported as they grow.
There are three tools that you may want to use to protect your children, including:
- A will with a parental appointment of guardian
- A power of attorney
- A trust
Here is more information on each and why they’re so important for your kids.
A will with a parental appointment of guardian
The first thing you should do is set up your will and a guardian for your kids. A guardian will take over their care if you are incapacitated or pass away. Having a guardian in place prevents your children from going into foster care or other situations that you would want to avoid.
A power of attorney
The next thing to set up is your power of attorney. A power of attorney document may give someone power over your finances or health care, so you need to think carefully about who you’ll assign to the role. Consider choosing someone who you know also has your children’s best interests at heart, so they can be protected, too.
Finally, make sure you set up a trust to pass on assets to your children. You probably have a life insurance policy. If you do, you can set the trust up as the beneficiary of that policy and route it there upon payout. Then, the trust will hold those funds and send them to the beneficiaries (your children) in the way that you decided upon when you set it up. For example, if you have a life insurance policy of $500,000 deposit into the trust, you may set up the trust to pay out $250,000 to each of your two children over the course of the next 10 years or to pay out in full when they turn 25, for example.
These are three documents that may help you protect your children. These and other options may help you rest easy knowing they’ll be cared for if anything happens to you.