Many young families know they should have an estate plan in place, but put it off because they think it will be too expensive or, like most people, they just don’t want to think about becoming sick or dying.
However, having a young family means your kids and spouse rely on you, so you owe it to them to make sure they are taken care of if you aren’t around to do it yourself.
The 7 estate planning essentials for every young family
1. Naming a Guardian for Minor Children
In most cases, if something happens to one parent, the other parent will continue to raise your children. The more important question is, who will raise them if something happens to both of you?
Thinking about your own mortality is difficult, yet very important. If you have not named a guardian for your minor children in Minnesota, a Minnesota court will do it for you. This person could be anyone, may not be someone you trust and, most importantly, the person will not know what your wishes are.
2. Naming Someone to Manage Your Children’s Inheritance
Unless you leave instructions in your estate planning, a Minnesota court will appoint someone to oversee your children’s inheritance. You may not know the person appointed and, this can be very expensive.
3. Reviewing Insurance Needs
Part of the estate planning process is to review the amount of life and disability insurance on both parents. A trusted financial adviser can help you and your family determine how much insurance is appropriate.
4. Planning for Disability
I often joke with my clients that “I am more concerned about you when you’re alive then when you pass, because you are still here.” Sustaining a disability is far more likely than dying at an early age. Disability and incapacity should be planned for. You want to make sure that if you become incapacitated for a period of time, your business, health care, and financial decisions are made by someone you trust.
5. Naming a Personal Representative or Trustee for Your Estate
The person you name as your personal representative or trustee will have a very important job. This person will be responsible for locating and valuing your assets, locating and paying your final bills, distributing your assets, hiring an attorney and other advisers, etc. Given the magnitude of the job, you should choose someone who you trust, rather than have a court decide for you.
6. Providing Instructions for Distribution of Your Assets
If you do not provide instructions as to how you want your assets distributed upon your death, the State of Minnesota will decide for you.
7. Putting Your Plan in Place
Estate planning is an easy thing to put off while you are young and healthy. However, you can provide a great gift to those you love by putting a plan in place now. It is much easier to solve problems before they happen!