Caring for your family is as much about the future as it is the present. We all do what we can to secure our kids’ futures. We save money, contribute to college funds, and so on.
It’s also necessary to plan for the worse. No one knows what tomorrow brings. Sudden events could render you incapacitated or worse, end your life.
Therefore, estate planning is so important. It provides a way to care for your children even when you are unable to do so directly.
Here are some ways that estate planning can benefit your children.
Estate Planning Can Name Your Child’s Guardian
Embedded in your estate plan, you can choose who will care for the kids when you are unable. Your plan can account for both your death and incapacitation.
Without a plan in place, the courts will decide what happens to the kids. In the best case scenarios, it will hand your kids over to a caring, willing relative. However, this outcome is not guaranteed.
The court has the authority to turn your kids over to a professional guardian. This person could be a complete stranger. Your children could also be separated and sent to different individuals. They could end up in group homes, not receiving individual attention or care.
Clearly, you want to avoid this situation, and a strong estate plan is the best way to prevent this outcome.
Estate Planning Can Secure Your Child’s Financial Future
Depending on your estate and your kids’ needs, you may be able to future-proof their finances. Using a trust, you can better control their money.
A trust acts as a living financial entity. It can acquire and sell property and continue to grow your wealth. This can give your children a more secure livelihood, one that is less likely to deplete.
Furthermore, you can control who gets money, when, and how much. Rather than giving your beneficiaries everything at once, a trust can put them on an allowance. This can help curb squandering. In fact, you can even appoint a trustee who can cut off an irresponsible recipient and help them create a sustainable financial plan.
Estate Planning Can Protect Your Child’s Assets
A strong plan does more than just distribute wealth to your beneficiaries. It can also build restrictions and designations around your finances.
For instance, you can designate funds for a specific purpose. You can make sure that no one can touch savings funds that are set aside for the kids. This can protect college tuitions, graduation gifts, and so on.
Such designations are especially helpful if you become incapacitated. In that situation, your power of attorney gains control over your welfare. They will make decisions regarding your healthcare and finances. Depending on your plan, this power can be broad.
Regardless of how much you trust your power of attorney, you also want to limit their authority. You can restrict their access to your children’s money, ensuring that their focus will be on caring for your day-to-day needs.
Our firm is here to help you create a solid estate plan that will benefit your children. For a free consultation, fill out our online contact form, or call us today at (410) 593-0040.