Having a baby is the most exciting part of a couple’s life. But after the showers are over and the baby is home safe, it’s time to start thinking about the future once again.
Once you add a child to your family, there are several things you need to do for the security of yours—and their—financial future.
- Take out life insurance. As a childless couple, if one of you were to die, the other would just have themselves to support. But once you add a child, you have additional expenses that one spouse alone might not be able to meet. Decide on what your goal is with this coverage—to give the other spouse time to recover and get things in order? For college expenses? To pay off the house so there are fewer expenses? Once you know your goal, you can decide how much of and what kind of coverage to buy. Your goals will also determine who should be the beneficiary of the policy.
- Set up a family trust. Setting up a trust accomplishes many things. One of those important things is to handle situations where the unexpected happens. No one likes to think about it and no one things it will happen to them. Having a trust in place makes sure that if something unexpected does happen, then there will be someone in place to take care of your assets for the benefit of you and your children. It’s easy and fast to do. It just takes a little planning and thought. Then you and your children are set.
- ** Here is a thought for those of you who are new Grandparents….This would make a great baby gift that lasts forever…agree to pay for setting up the new family trust for your child and new grandbaby! Babies grow quickly. So, clothes and toys come and go. But, a family trust will benefit them forever. Think about it. That is a smart idea. The bonus is that if additional grand kids come along, the trust can be amended quickly and easily over time to accomodate additions to the family. At our firm, if you hire me to prepare your family trust, we do not charge for revisions to the trust to add additional children.
- Set up a college fund. Establishing a college fund ensures there is money for education, but including it in your estate plan means ensures the security of that fund. A trust allows you to set parameters for the use of that money, even if you aren’t around to monitor the use yourself.
- Choose a guardian. If something happened to both parents, who would raise your child? If you don’t want the state and the foster care system getting a say in this, you need to be specific and put it in writing. In many states, even if there are close, blood relatives available and willing, your child will still spend time in foster care if there is not a legal directive.
Over the past 30 years, the Law Offices of Christopher A. Benson has helped more than 800 clients prepare and utilize simple and effective planning techniques to protect them and their families in order to avoid probate, save estate taxes, save money and save added emotional burden that comes from long term illness and/or death of a family member. Give us a call to schedule a free consultation to find out how we can help you and your family.