Establishing an estate plan is the best way that you can protect your family from the uncertainties of the future. While most people believe that estate planning is reserved for the rich and wealthy, this is simply not the case. An estate plan can be developed by anyone regardless of their income and consists of a set of directives for trusts, guardianship matters, and assets. In today’s post, we take a look at some things to consider when it comes to protecting your family’s future.
One of the first things you should focus on is establishing a will. Regardless of if you own substantial assets, you need to draft a will according to your state’s laws. A will can help to ensure that your selected heir will receive your chosen set of assets that you desire to leave with them. In addition to that, your will should list an executor who will be responsible for paying your debts and distributing the remainder of your assets, based on your wishes.
In the event that you pass away without a will, your property could get seized by the government or they could get passed on to survivors in your family, according to your state’s laws surrounding intestacy or in other words, your children or spouse.
Besides using a will to ensure that your heirs will receive your assets when you die, you can also create a living trust as well. The major difference between a trust and a will is that, unlike wills, a living trust can avoid probate. Probate is the process by which the court determines if a will is actually valid. This is a time-consuming and expensive process. A living trust can prove to be ideal when it comes to including children as a part of your estate planning wishes.
Clear All Debts
The process of paying off a debt can prove to be especially stressful when you are in the midst of grieving for a family member. The law stipulates that you have a legal obligation to pay off your own debts and the debts of deceased loved ones as well. Therefore, if an individual signs as a cosigner for a mortgage, and the other cosigner passes away, said individual is still responsible for the entirety of the debt.
If your family depends on your financial support and views it as being essential for their livelihood, you need to get a life insurance policy. Life insurance can help to replace your income in the event that you pass away. This can prove to be especially beneficial to parents of young children as well as adults who would not be able to maintain their standard of living without the income of another individual such as your spouse or elderly parent. The key thing to remember is that the coverage should be large enough to cover an adequate amount of money for day-to-day tasks such as cleaning, laundry, childcare, and other things that are critical to a growing family.
Most experts agree that an emergency fund can help to protect your family’s future. Your emergency fund should consist of at least four to six months of your average monthly living expense and can help to cover unwelcome surprises such as major home repairs or renovations, health emergencies, stolen/damaged property, and more.
Power of Attorney
When people think about power of attorney, they usually associate it with giving someone else the power to make medical decisions in the event that they become incapacitate and are unable to make decisions on their own. However, the power of authority provides multiple different benefits which can help to protect your family’s future. For starters, it eliminates the need for guardianship or conservatorship. For instance, without a power of attorney, if you become incapacitated, the court appoints a conservator or guardian for your children. Additionally, power of attorney gives agents the ability to make other important decisions regarding health, investments, bills, assets, debts, and more
Family Identity Theft Protection
Oftentimes, when people consider using identity theft protection services, they never consider getting their children protected. But just like an adult, children are also susceptible to identity theft. Data suggests that child-related identity theft can go undetected for over ten years. Therefore, monitoring their personal information is essential when it comes to protecting their future. Nowadays, most companies provide family identity theft protection plans which are designed to cover entire families.