Parents of young children face many challenges in estate planning. In many cases, parents are still at the beginning of their careers and have not yet accumulated much in the way of financial assets. Financial planning is easier said than done as current bills need to be met before any resources can be set aside for the future. It can seem counter intuitive to be saving for a child’s education at the same time you are paying for your own, either in student loan debt or in pursuit of an advanced degree.
If you or your spouse were to die, your family financial situation will change dramatically, either directly through loss of income or indirectly in the loss of important care provided to the family. The monetary void needs to be filled.
Whole life insurance is often referred to as an instant estate. Different multiples of annual incomes are often bandied about as to the proper amount of coverage.
Your anticipated needs and your current assets will determine what other insurances you may need. If paying off the mortgage will be a priority, you can consider a term life policy ending at or near the end of your mortgage. You should also consider how your children will pay for college and how the family will be able to maintain your present lifestyle in your absence.
Estate planning can be an important tool in providing for these future goals. You will hopefully see many of the important events of your children’s lives. Proper planning now can make help make the events all the more enjoyable. Life is always easier when you see your plans make your dreams come true.