If you are a parent, you will want to make sure that your children are always financially secure, no matter what age they are. Therefore, when you start planning your estate, it is likely that this will be your biggest priority, especially if your children are still minors.
While you may be under the assumption that your children will automatically inherit your estate in the event that you pass away unexpectedly, this may not be necessarily the case. This is why it is paramount that you are proactive in your approach to planning your estate for the benefit of your children. The following are some tips.
Consider a Revocable Living Trust
Trust-based planning encompasses many different aspects of life, such as your financial planning in the event of incapacity. For example, if a parent was to become incapacitated, you can set directives so that your children can be financially supported through the trust. A Revocable Living Trust also allows you to keep complete control over the finances during your lifetime. It also ensures that the assets help within never have to go through the lengthy and costly probate process.
Set up limitations or contingencies
You will want to make sure that your children do not inherit a large sum at an early age before they have the maturity to use it wisely. For this reason, you can set specific limitations for the trust. For example, you may want your child to inherit the full amount of their inheritance when they turn 30 rather than 18 so that they are better prepared to handle it.
Name your children as secondary beneficiaries
If you have a spouse, you should consider naming your children as secondary beneficiaries to certain assets as a guarantee that they will inherit them if both parents pass away.
If you are planning your estate as a parent, make sure that you understand the full range of options available to you so that you can plan your estate in a way that’s optimal for you and your children.