16 Nov Estate Planning for Young Parents
At Phelps LaClair, we love children. They remind us that we need to be looking ahead in anticipation of their lives and their challenges. We all desire that our ceiling should be their floor. So in the spirit of building a legacy that you can pass on to them, we want to offer four estate planning tips for young parents—because it’s never too soon to plan for the future.
1. Insurance
When you have children who depend on you for everything, you need to consider what could happen should one of you become seriously ill, incapacitated or deceased. There are many financial realities that young parents have to face, including unpaid student loans, an expanding household, home ownership with a mortgage, and new careers. Though it’s not something you want to think about, it’s wise to make sure there is no financial burden in case “till death do us part” happens sooner than expected. Insurance cannot mend a broken heart, but it can bring peace of mind knowing that loved ones will be taken care of after you pass. Make sure you have adequate insurance to cover all of your children’s needs until adulthood.
2. Living wills and powers of attorney
It is good to include a Medical Power of Attorney and Living Will in every estate plan. Medical powers of attorney and living wills give direction to people whom you have chosen to make medical decisions for you, should you become unable to make end-of-life decisions for yourself. Also, by designating a financial power of attorney, you name someone to deal with your finances if you become incapacitated. Usually, a spouse is designated as a power of attorney, but it also is wise to designate someone else who can act on your behalf if an emergency arises when you are travelling or residing in a foreign country. Financial and medical powers of attorney are often overlooked by young people, but they are essential elements of a solid estate plan.
3. Guardianship
As young parents, you realize that you would do anything to protect the life of your child. But what if you were no longer able to do that because of death or incapacitation? Naming a guardian who will take care of them is going to be one of the most important things you can do for your children and your own peace of mind. However, a normal will is not a guarantee that your desires for the care of your children will be upheld in a probate court. Instead, you need to include guardianship as part of a living trust that you create. With a living trust, you avoid probate altogether and will make sure the children are well provided for.
4. Living trusts and LLCs
In well-designed estate plans, there are protections and tax advantages available through Living Trusts and LLCs that young parents can use to put your financial goals in motion, working toward securing a future you can pass on to your kids. A Living Trust also ensures that the inheritance goes to your children in the right way and at the right time. It’s kind of like establishing a fortress to guard the piggy bank that holds the college fund or the down payment on their first house. There are many ways to write a will or design a trust, and Phelps LaClair has been doing this for decades. We know what works and what doesn’t work to protect your assets and your wishes for passing on an inheritance to your children.
Having children is all about new beginnings, and as young parents, you know better than most the hopes and dreams we all have for our kids. As a second generation estate planning law firm with four decades of experience, Phelps LaClair, serving Phoenix, Chandler, Mesa and Scottsdale, is here to help you protect those dreams, with the support of sound estate planning. As these four estate planning tips for young parents like yourselves demonstrate, there is more to it than meets the eye. We understand the intricacies of wise and careful estate planning. Call us so we can work together to secure a strong foundation for the young lives you are building. Your first consultation with us is free. Don’t wait for nursery school or kindergarten—the future begins right now!
Images used under creative commons license (Commerical Use) 11/14/2019 Photo by Nicole De Khors from Burst