No one wants to think about what will happen after they die. However, it’s necessary to make a plan for the people you leave behind. You want to make sure your kids will be well taken care of after you go.
Arrange for Guardianship
If your children are under the age of 18, they will need a legal guardian to care for them. This guardian will provide a place for them to live, care for their health, and look after their education. Essentially, they will raise and care for your child as you would. If you do not appoint a guardian before you die, then the court will determine the best course of action.
Arranging a guardian beforehand allows you to have a say in who will be responsible for your children. To appoint a guardian, you will need to name this person in your will. You can name two people if they are a couple and you can even name a specific guardian for each of your children.
Set Up a Trust
You need to consider the financial needs of your child. A trust can allow you to transfer your assets to your child upon your passing. They can use this money immediately or save it until it’s needed. Money in a trust can be used for living expenses, education, and more.
Using a trust is a smart option because it is exempt from taxes (depending on the type of trust) and it allows for a clean transfer of assets. Putting your assets in a trust is the only way to avoid probate court. If your assets go into probate court, it can be months or even years before your children have access to anything.
Purchase Life Insurance
In addition to setting up a trust, you should also purchase life insurance for yourself. If you die unexpectedly, this money can be used to cover any outstanding debts, funeral costs, and other expenses your children may have. It provides them with additional financial security. It will cover lost income after you pass and your children will be able to be financially supported as they transition to a new living situation. Of course, their appointed guardian will be managing all the money but it’s comforting to know it will go toward caring for your children.
It’s good to have a plan in place in case you pass unexpectedly. As you make a plan, be sure to share it with others. Inform the potential guardians of your intentions. Tell family and close friends what your plans are so they can help your children through the process.
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