By Harness Wealth — — May 8, 2019

These Estate Planning Tools Help You Ensure Your Kids are Provided For

Having children is a life changing experience, as you suddenly become responsible for a whole new person you created. Your child depends on you for everything until at least the age of 18 and likely for much longer – and this means your bundle of joy comes with a bundle of legal and financial responsibilities.

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Having children is a life-changing experience, as you suddenly become responsible for a whole new person you created. Your child depends on you for everything until at least the age of 18 and likely for much longer – and this means your bundle of joy comes with a bundle of legal and financial responsibilities.

Making plans as early as possible for current or future children is essential to ensure your kids are provided for throughout their childhood and teenage years. And, it’s important not to just plan for expected events – such as your child going to college – but also to prepare if something goes wrong. In fact, making an estate plan is something every parent needs to do because otherwise your child could be left in very dire straits if something should happen to you.

While it’s not fun to think about a serious illness or an untimely death that renders you unable to raise your kids to adulthood, you must prepare for this possibility. These are some of the tools that could help.

Estate Planning Tools for Parents

Parents should plan for their child’s physical and financial care, both when things go right and when something goes wrong. Some of the different steps parents need to take include:

Depending upon your child, there may also be other steps you need to take as well. For example, if your older child is not responsible with managing money, you may wish to create a spendthrift trust instead of simply leaving money directly to your adult son or daughter. A spendthrift trust gives a trustee control over trust assets to be used for your child’s benefit. Since your child has no access to trust assets, wealth can’t be lost in bankruptcy, to creditors, or to irresponsible spending.

Parents of special needs children also need to address where children will live after a parent is no longer able to provide care, as well as how children will receive financial support. A direct transfer of wealth to a disabled child could cause a loss of access to means-tested benefits such as Medicaid or Supplemental Security Income. Parents can use a special needs trust to provide funds for a disabled child’s supplemental needs. The creation of a special needs trust allows a responsible trustee to be chosen to manage trust assets for the disabled child and protects a child’s need-based benefits.

Start Your Planning ASAP

It’s important that parents start planning for their children as early as possible. Saving for college should begin as soon as a child is born to amass a sufficient nest egg. And, every parent should make sure a guardian has been named and financial plans are made for the care of a child, as you don’t want your son or daughter left unprotected if you’re not able to be there to care for them yourself.

An experienced attorney can provide assistance with estate planning for current or future kids so you can get the right tools in place. Knowing your kids are provided for will give you peace of mind and will give your children the security they deserve.

To identify advisers who are right for you, get started here.