Some of the most heartwrenching stories shown on the news are the ones of women (and men) who lost their lives way too soon and leave behind small children. Here’s how to prepare for the unexpected when planning a family legacy.
Our thoughts immediately go to those children with thoughts of who will raise them now and how they will be able to care for them financially.
Was the family prepared for this kind of event? Is your family?
Are you preparing for a family legacy?
No one likes to consider the possibility of leaving this world while their kids are still young and vulnerable.
Planning for death is not on our minds. However, the reality is, no one has the promise of tomorrow.
It is vital to make preparations for your children’s care and the handling of your assets in the event of your passing.
Everyone needs to take the time to write a will.
While this may seem like a daunting task, here is a guide to help point you in the right direction.
How to Prepare for the Unexpected
The Will Itself
Your will is a legal document that spells out the details of your final wishes in simple terms.
It keeps you in the driver’s seat of your affairs after you pass.
Without a will, many decisions will fall into the hands of the court based on the laws in your state.
Those decisions may not even come close to how you would prefer things to be handled.
The decisions include dividing and allocating money and property and caring for your children.
Depending on your family situation, the courts will decide who gets guardianship of your children.
If you are married to the other biological parent, it will most likely be them.
However, if you have remarried, are single/divorced, or living in a civil union, the courts may place the kids with someone you would never choose.
A will puts the power back in your corner.
According to Forbes, choosing a guardian to take over the responsibility of raising your children is not a decision to take lightly.
If the task does not fall directly to your spouse, then serious thought must go into your choice.
It cannot be based solely on who they get along with, although that is undoubtedly an important factor.
The person you entrust with your children should also be emotionally and physically capable of doing this task.
Are they raising children of their own?
How will your children fit into their home and lifestyle?
Do their values and discipline style line up with yours?
Your appointed guardian should also be financially responsible.
The terms of the will should also provide the money needed for this new job, but the guardian must be good with money and use it wisely.
Finally, and probably most importantly, talk with this person and get their thoughts and perspective.
Make sure they are willing to take on this job.
Discuss the impact on their lives and the kids, and make sure they are fully committed to assuming this role.
You may think you don’t have enough money to worry about a will.
It isn’t about the amount of money; it’s how you want it distributed.
It is also about ensuring all the final bills and arrangements are handled.
You need to assign an executor.
It will be their job to handle all the financial obligations after your passing.
This is a big responsibility, so make sure you choose someone you can trust.
If you do not name one, the courts will.
The executor and the guardian can be the same person, but they do not have to be.
However, the two will need to be able to work together so the guardian has the necessary financial help with their additional expenses.
Depending on your assets, you will also want to set up a trust so there is money available for the children when they are out on their own.
How to Write a Will
There are several ways you can go about preparing a will.
There are online services that will walk you through the process, and everything can be taken care of in a reasonable short amount of time.
This is a good option for those who have a simple plan for guardianship and distribution of assets.
If things are not quite that simple, it is a good idea to hire a lawyer to help with the preparation of the will.
They are experienced in your area’s laws and know how to guide you to get the best outcome and work to ensure your wishes are followed through.
Life Insurance for a Family Legacy
Family life insurance is another often overlooked safety net, says the College Investor.
It is so important to have this cushion should a tragic event affect your young family.
It will provide peace of mind that with all the other decisions and tasks at hand, there will at least be the financial means for the day to day responsibilities.
There are so many affordable options for life insurance for the family.
There is certainly one that will be right for you.
Know the Difference Between a Trust and a Last Will
In most states, a trust is created when one party makes a will. A will or testament is usually drafted after consulting with an estate planning attorney, or at least with a close friend or family member.
This legal document spells out the person’s wishes when they die. While creating a will is necessary, a trust can be your sole discretion.
The main difference between an intestate trust and a will is that the latter often contains a provision stating the terms and conditions for the trust transfer.
In contrast, a trust deed, in many cases, does not contain any provisions.
It provides the individual or group’s name and the terms under which property or assets are transferred.
A trust deed also protects the beneficiary against creditors and other liens.
Here are the important benefits of providing a trust for your children:
If your children aren’t of legal age yet, it’s best to indicate on your last will the trustee or executor to manage your assets until your children reach their adult age.
Doing so gives you peace of mind that your wealth will not be misspent.
With an educational trust set in place, you will ensure your children’s education and future career by allowing them to take whatever college course they desire without worrying about money for their studies.
If you have a child with a disability or special needs, designating a trust is essential to ensure that their medical and basic needs will be provided for as long as you have trust funds available.
You can specify the guardian of your special child and choose one who will not abuse your son or daughter and will provide them with ample respect, including the proper management of your wealth.
The Little Details
In addition to the big projects, like the will and life insurance, a few little details are also very important.
You also have to discuss minor details, such as the person to whom you can entrust your pet or collections. You may want to give it to your grandchild or a close friend.
Also, ensure that you keep the will in a folder where all these important documents are organized.
Make sure someone in your family knows exactly where it is.
It is also a good idea for the executor to know its location.
It is also a good idea to list all your passwords in one secure location.
So many passwords are needed for almost all online transactions and social media accounts.
It can be frustrating and time-consuming to try and figure out all of these out, especially when dealing with grief.
This is why it’s important to plan your family legacy.
The Bottom Line
No one likes to think about death or the difficult details that follow, but being prepared is a gift to your family.
Having a will and leaving instructions will go a long way in establishing a family legacy that leaves them cared for and feeling loved.