Whenever you bring a new life into the world and into your family, things may seem overwhelming. Understandably, new parents are focused on providing for their new child's immediate needs. However, all new parents should also be aware that their estate plan needs a check-up as well. Here are four things each family should do to make sure things are taken care of if something were to happen to the parents.
1. Decide on Who Should Be Your Decision-Makers
First, parents need to understand what types of fiduciaries will be needed to create their estate plan. A guardian would be the person who would raise your child(ren) in the event the parent passes away. The Executor or Trustee would be in charge of distributing the inheritance to the heirs and, (in the event a trust is set up) make decisions on what the money is to be used for. Finally, parents need to think about who would make financial and legal decisions on behalf of the parents if the parents were to get sick or become incapacitated (and unable to make decisions themselves).
2. Set Up Incapacity Documents
Each parent needs to make sure that someone has the authority to make decisions for the parent in the event the parent were to become sick or disabled. A parent's wishes on end-of-life decisions must also be established. The best way to do this is for each parent to have Health Care Power of Attorney, Living Will, HIPAA Release, and Financial Power of Attorney documents prepared by an experienced estate planning attorney.
3. Set Up Post Mortem Documents
Next, each parent needs to make sure that their wishes for who is responsible for raising their children are properly written down and executed. This includes both the decision on who would take care of the children, as well as their wishes for each child receiving his or her inheritance. Through a Last Will and Testament, this is simply a decision of who receives what amount. With a trust, the parent can further customize his or her plan to include when, why, and what the inheritance can be used for.
4. Financial Review
This step is almost as crucial as the first three. After making sure the estate plan is properly set up, parents must then look to make sure their financial plan is in order. First, parents must review their current financial situation to determine if they have enough life insurance to provide for children (and potentially a spouse) if the parent were to pass away unexpectedly. Next, the parents must also make sure their assets are coordinated with their estate plan. This means reviewing the titling/ownership of assets, beneficiary designations, and the relationship of the assets to a trust (if a trust has been established).
Regardless of what your needs are, it is always recommended to seek advice of experienced professionals. If you or a loved one has questions or is ready to create their own estate plan, call The Rosenbauer Law Office, LLC today at 513-463-6789 to schedule a complimentary consultation.