Family estate planning has special considerations. Families often need to take specific and direct steps to protect their spouse and children. While many individuals postpone estate planning until they are older doing so can often lead to disastrous consequences.
One important consideration when family estate planning is to nominate a guardian for minor children. A guardian is a person who will take over raising a child if both parents are unable to care for the children. He or she must usually be appointed by a court and the nomination is typically part of a will. The guardian will have legal authority to make decisions about the children, such as what type of medical treatment they receive, where they go to school and where they live. If a guardian is not named, then the court has to appointment someone without the benefit of knowing the parent’s preferences.
Minor children cannot directly inherit property. As such, many young couples create trusts that direct how remaining assets will be used for the benefit of their spouse and children. Another important consideration is appointing a trustee. Some spouses choose the surviving spouse. Others may choose someone who is particularly good at handling money or who the parent believes will follow the instructions of the trust. If a person is not specifically named to manage your children’s inheritance, then the court may have to appoint someone to complete this task.
Another consideration when family estate planning is life insurance. The primary reason to have life insurance is to provide financial support to dependents if something happens to you. Life insurance can replace the earnings for a number of years while the children are still minors. Having life insurance allows the surviving spouse to have access to cash he or she needs to support. The person making the estate plan may want to consider how many years it will be until his or her children will not need any support and multiply this by his or her earnings to determine the amount of life insurance is necessary. He or she may need to take into consideration other factors, such as whether additional services would be needed if there is only one parent involved.
Another part of an effective estate plan considers what will happen in case the primary becomes incapacitated. The parent may want to establish an advance medical directive. This is a document that sets out a person’s wishes for end-of-life decisions. For example, a person can decide whether or not he or she wants CPR or life support if he or she has a terminal condition or is permanently unconscious.
These are just a few of the important and complicated factors to be considered and completed during family estate planning.
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