If you have minor children and do not yet have an estate plan, you should consider creating one. Without an estate plan, you put your kids at risk if you should ever die. It may seem like a far-away concern, but you want your children to be taken care of in case the unimaginable happens. You can use various tools in your estate plan, and here are three vital tools to use to protect your minor kids.
A Will with a Named Guardian
The first tool you should have for your estate plan is a will, and you need a will whether you have kids or not. A will allows you to state your wishes, among other things. One thing you can write in your will is the name of the person that you choose for your children's legal guardian. If you die, the court must honor your wishes by giving custody rights to the person you name as your children's guardian. Failing to provide a named guardian leaves the decision up to the court. The court probably will not know who you would choose, so they might choose the wrong person.
Life Insurance Proceeds
The second tool you might want to consider using is life insurance. Many people do not think of life insurance as an estate planning tool, but it is one. A life insurance plan provides monetary compensation to your beneficiaries when you die. If you have minor kids, leaving them with some money is vital and helpful. Your kids can use this money to pay for their college educations and other essentials. When you buy life insurance, make sure you list your children as the beneficiaries.
A Trust for Each Child
The third tool that you might want to consider is a trust. A trust is something you create that provides protection of assets. You can create a trust for each child, and you can even place assets in it. If you die, your kids will inherit these trusts, but they will not be able to use the money in them until they reach a specific age.
These are three of the top tools that people use to protect their minor children when creating an estate plan. Are you interested in making one? If so, talk to an attorney that handles estate planning services. Contact a local estate planning attorney, like Abom & Kutulakis LLP, for more information.