When you create a family, everything changes. It changes your outlook on life and your priorities. It also makes having an estate plan in place even more important. Whether you are creating an estate plan for the first time or updating an existing plan, it is important to gear your plan toward protecting and providing for your family. With that in mind, the Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC explain five essential estate planning steps for young families.
5 Steps to Consider in Your Estate Plan
Your unique estate plan may include additional tools, strategies, and steps; however, the following five steps are essential for any young family to consider when estate planning:
- Execute a Last Will and Testament. While a Last Will and Testament typically serves as the foundation of any estate plan, it is especially important for the parents of young children to have a valid Will in place. This is because a Will is the only opportunity you have to officially name a Guardian for your minor children. If anything happens to you and your childâs other parent, and a Guardian must be appointed by a judge, the judge will look to your Will to find out who you wanted to care for your children.
- Decide how your childrenâs inheritance will be protected and who will manage it. Estate planning for young families typically involves the creation of a trust agreement because a minor child cannot inherit directly from your estate. Creating a trust lets you appoint someone you trust who you feel will protect and manage your childâs inheritance to be the Trustee of the trust. Moreover, the law requires the Trustee to follow the trust terms you create, allowing you to decide how the trust assets will be used to care for your children.
- Make plans for your incapacity. An accident or illness could leave you incapacitated at any time. If that happens, someone will have to take over control and management of your assets. As part of a young family, you probably want your spouse or partner to be able to easily step in and take control on your behalf. One way to do this without the need for court approval is to create a revocable living trust that names you as the Trustee and your spouse/partner as the successor Trustee. If you become incapacitated, your designated successor Trustee takes over as Trustee automatically without the need to petition a court.
- Review and/or purchase life insurance. For many young families, estate planning relies heavily on life insurance as a safety net for children in case something happens to either or both parents. As such, now is the time to review your life insurance policies and decide if you need to purchase additional insurance. You may also want to consider adding an Irrevocable Life Insurance Trust (ILIT) to your estate plan to ensure that your family does not need to worry about funeral and burial expenses if something happens to you.
- Appoint healthcare surrogates. Every adult should consider executing an advance directive that designates an Agent who can make healthcare decisions if incapacity strikes. In addition, as the parent of young children, you may wish to consider executing a limited power of attorney giving a family member or close friend the ability to make healthcare decisions for your children if you are unavailable to make those decisions yourself for any reason.
Contact an Essex Junction Estate Planning Attorney
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about estate planning for young families, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.
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