Creating a secure future for yourself and your child requires careful planning. While we may not know what tomorrow holds, creating a safety net in the form of estate planning can be a way to cushion you and your child from some of life's unpredictable moments.
But what is estate planning and what does estate planning look like for parents?
What is estate planning?
Estate planning is a way for anyone to put their affairs in order when it comes to managing assets, policies & investments. It's an extensive process that involves structuring your financial affairs to ensure:
Essentially, it's a way to safeguard you and your loved ones. It can also give you peace of mind knowing that there will be no infighting amongst loved ones since everything will be clearly stated and handled according to your last wishes.
You can still do it even if you haven’t accumulated large assets
A common misconception is that this is something that is only for the wealthy or when you are old. Furthermore, people tend to think that it only matters once you have large assets that can be passed down as an inheritance to children. However, you can get started even if you are slowly building your assets. Simply speaking to a financial planner can help you find a suitable plan that can grow with you as you begin to progress in life and accumulate more. The aim is to start.
Where to start estate planning as a parent?
The following are some key considerations to keep in mind when starting the estate planning process as a parent:
Create a Will. A will is a legal document that outlines how you want your assets to be distributed after your death. This includes not only your financial assets, such as bank accounts and investments, but also personal items like jewellery, artwork, and heirlooms. It is important to ensure that your will is up-to-date and reflects your current wishes, as well as your children's needs.
Another key consideration is the appointment of a guardian for your children. If something were to happen to you and your spouse, it is important to have someone in mind who will take care of your children and raise them in the way that you would want. This person should be someone you trust and who shares your values, such as a close family member or friend.
Setting up a trust. You should also consider setting up a trust. A trust is a legal entity that holds assets for the benefit of a specific person or group of people. This can be a useful tool for parents because it allows you to control how your assets are used for your children, even after your death. For example, you may want to set up a trust that provides for your children's education, or that releases funds to them in stages as they reach certain milestones. There are plenty of options that are available that can be suitable for your finances.
Have life cover in place. The thought of leaving your child(ren) without any means to protect and provide for them financially can be any parent's worst nightmare. Having life cover is one of the most affordable and basic steps to take towards securing your child's future, no matter what happens to you. You can start today by requesting a obligation-free quote for peace of mind.
Estate planning can seem like a daunting task, but it is an important step in ensuring that your children are taken care of in the event of your death or incapacity. By creating a will, appointing a guardian, setting up a trust, planning for incapacity, and reviewing your plan regularly, you can ensure that your children's needs are met and that your wishes are respected. Consult with an estate planning attorney or a financial planner for proper guidance.
