5 Estate Planning Tips for Dependents
When you have people who are dependent on you, like children or elderly parents, you want to ensure they will be well taken care of in the event that you can no longer care for them. Here are five tips for creating an estate plan that will ensure your dependents are taken care of according to your wishes.
Hire an estate planner —An estate planner will make sure you think of and lay out every aspect of your estate plan. Estate planners stay up-to-date on tax rules and other laws and regulations, so they can help you ensure that your plan is legally and financially sound, leaving your dependents in the best situation possible.
Choose a guardian —Choosing someone to take care of your children in the event that both you and their other parent are deceased is a huge decision to make and deserves great care and time. You want to choose a guardian who loves your children and has the ability to take care of them into their adulthood. That means a guardian who has the financial capacity to care for your dependents, as well as the physical capacity to do so. So even though grandparents may be able to love and care for your children just as you did, they may not be in good enough health to care for a child or children. On the other hand, your sister may be able to love your dependents just as much as you did and be in perfect health, but is unable to hold a steady job or stay in a committed relationship. The goal of choosing a guardian is to make sure your children are loved and taken care of adequately, they receive a good education, their lives remain as stable as possible, and they receive emotional support to cope with your loss. It’s crucial to communicate with your chosen guardian. Ask early (and often) if they are comfortable being the guardians of your child or children.
Develop a trust —A trust is often used when people have minor children or dependents who are incapable of taking care of themselves. As the trustor, you put a trustee in charge of the beneficiary’s property and/or assets until the beneficiary meets requirements such as reaching a certain age or milestone. Usually the named guardian is also the trustee, however, every situation is different. Just like choosing a guardian, make sure you take time in choosing a trustee who is trustworthy and capable.
Start as soon as possible —As soon as you have a child or otherwise become responsible for a dependent, it is important to get an estate plan in place to protect them in case of emergency.
Reevaluate often —As time goes on, your situation may change quite a bit from your original plan. For example, anytime you acquire a new asset or debt, it should be included in your estate plan. Also, you may realize that the guardians you originally chose for your dependent is no longer the right choice — they might get sick or die, or move far away. You may have more children or unexpectedly start caring for an elderly family member. Any time major changes happen in your life that impact what you would leave behind and who you’d want to leave it to, revisit your estate plan.
We all want the people we leave behind to be cared for after our deaths as we cared for them in our lives. You may have no control over when or how you will die, but you do have control over what happens to your dependents.
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This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.