Fortunately, estate planning affords parents the power to protect their children from uncertainty.
Family Estate Planning Milestones
Almost everyone knows that having an estate plan is a matter of practical necessity. However, far too few Americans ever take the measures needed to establish a comprehensive estate plan.
Of course, different people have different reasons for putting off their planning. Oftentimes, parents believe that an estate plan is simply an end-of-life contingency, or, perhaps, a series of legalistic documents that serve little purpose beyond designating heirs and disbursing inheritances.
However, estate planning encompasses far more than matters of inheritance and legacy: an estate plan could provide your family with the security needed to withstand and weather the best and worst of life’s many unexpected surprises.
Estate Planning for the Parents of Young Children
No parent wants to contemplate their own mortality after having a child. Unfortunately, accidents happen with alarming regularity. You could protect your family by:
- Writing a will. A will is both a basic and essential part of any estate plan. A last will and testament allow you to designate heirs, appoint a guardian for your minor children, and name an executor for your estate.
- Designating a guardian. A guardian is an adult who can take care of your children in the event that you, or your spouse, are ever incapacitated, killed, or otherwise unable to provide for your family.
- Delegating the durable power of attorney. The durable power of attorney lets you nominate a trusted person—such as a spouse, relative, or lawyer—to manage your health care or financial affairs if you are no longer in a position to make independent decisions.
How a Trust Could Protect Teenagers From Adolescent Impulsivity
Teenagers are not always the best at making and taking well-considered decisions. While a simple will provides parents with the opportunity to provide an inheritance for their minor children, there is no guarantee that a teenager will use their inheritance responsibly.
Trusts are a time-tested solution to many parents’ inheritance-related dilemmas. A trust is, in effect, a legal entity that can receive, own, and manage a variety of assets. Florida allows residents to establish several different varieties of trusts, including revocable living trusts.
A revocable living trust provides parents with several clear advantages, including the following:
- Trusts allow many inheritances to be disbursed without the need for any formal or court-supervised probate.
- A revocable living trust can be conditioned. For example, you could mandate that your child’s trust funds only be used for maintenance, housing, or educational expenses until they reach an older (hopefully, wiser) age
- Revocable living trusts can be amended when the settlor, or founder, is still alive, affording parents significant flexibility.
Life Insurance and Long-Term Care Insurance Provide for Your Family in Old Age
Insurance policies can complement almost any estate plan. Life insurance, for instance, can help parents provide a safety net in the event they pass away unexpectedly.
Life insurance typically comes in two different forms:
- Term life insurance. Term life insurance covers set periods of time. For example, term life insurance could cover 10-, 20-, or even 30-year increments. Since term life has a set expiration date, it usually costs less than permanent life insurance.
- Permanent life insurance. Permanent life insurance policies provide funds irrespective of when you pass away. These policies can be useful in providing for adult children with disabilities.
Some hybrid life insurance policies also cover long-term care assistance.
While Florida’s federally-funded Medicaid program offers senior citizens limited resources to pay for long-term care-related expenses, a comprehensive insurance policy could provide expanded coverage, ensuring that parents do not have to rely on their adult children to support them through their golden years.
Contact an Estate Planning Attorney Today
Taking the first step toward establishing a long-lasting legacy is often the most difficult. However, our experienced attorneys have decades of experience helping Florida families of all backgrounds identify the best strategies to protect themselves from uncertainty. Please send DeLoach Hofstra & Cavonis a message online or call us at 727-397-5571 to schedule your initial consultation.