Over half of all Americans do not have even a basic estate plan in place. One of the most common reasons people offer for their failure to create an estate plan is that they don’t feel they have enough assets to warrant an estate plan. If you have minor children, however, you have the most valuable and important “assets” you can have. As such, you need an estate plan in place regardless of the monetary value of your estate assets. It is always best to work with an experienced Illinois estate planning attorney when creating or updating an estate plan; however, you may wish to consider the following estate planning tips for parents of minor children for now to give you an idea of what you may need in your plan.
2. Know how much you need to leave behind.
Take the time to sit down and calculate how much it will cost to raise all of your children at least to the age of 18. Of course you likely don’t have that kind of funds available right now but you can use life insurance as a cushion until you build up your asset portfolio.
3. Plan for incapacity as well as death.
People frequently focus only on the possibility of their death; however, incapacity could leave your children without a parent, for all practical purposes, as well. Make sure you plan for this possibility.
4. Make use of powers of attorney.
Anytime someone is caring for your child the caregiver should have a power of attorney to allow him/her to make life or death medical decisions should it ever be necessary.
5. Familiarize yourself with trusts.
Because minor children cannot inherit directly, most parents set up a trust agreement to manage the assets they leave behind. Understanding the basics of a trust is, therefore, essential for the parents of minor children.
6. Focus on liquidity.
Make sure that the assets you do leave behind will be immediately available to help care for your children. Assets that get held up in probate cannot help your children. Therefore, estate liquidity usually depends on your leaving behind non-probate assets such as life insurance proceeds, trust assets, or accounts designated as “payable on death” or “transfer on death” (POD or TOD).
If you have additional questions or concerns about estate planning as the parent of minor children contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.