Life Planning for Families: The Basics

Life Planning for Families: The Basics

Every adult needs a life plan; you don’t need to be a multi-millionaire with complex assets to plan for now and the future. If you’re above 18 years of age, it’s time to look into ensuring that you and your family are protected, as well as making a plan to cover where you want any assets you own to go and establish end-of-life decisions.

Taking Care of Your Family

When it comes to life planning, a stressor for many people is how to set their loved ones up for success when you are no longer around. In the event of disability, when income is low and needs are high, short-term and long-term disability insurance can be life-altering and ensure that you and your loved ones don’t go broke while providing for adequate care. In the event of your passing, life insurance provides a safety net that ensures your loved ones are provided for and that your estate debts and taxes are paid. It’s easy to shop around for life insurance, and online calculators canhelp you estimate life insurance rates and find policies that work for you. 

Other things you may want to consider:

  • Trusts — Set up during your lifetime or in your will, gifting money or property to your loved ones that can ensure they have adequate resources over their lives.
  • Real Estate — Make sure any real estate you own is titled properly. Some parents give themselves a life estate in their homes, with a remainder to their children to pass automatically after death. Spouses may want to ensure their home is owned jointly.
  • Guardianship — If you have minor children, you will want to include a provision in your will listing names of who you would want to be appointed guardian over your children.
  • Funeral Arrangements — You may want to consider some form of burial insurance to cover the cost of a funeral and/or cremation.

You can also take steps to care for your family by furthering your education and securing a job that allows you to provide for them financially. In fact, it’s never been easier to pursue degrees and find online jobs that can help you do just that. So, take a look at online courses for things like business administration, and use job boards such as Indeedto land that perfect job.

The Fab Four of Estate Planning

Every good estate plan will include four basic documents:

1. Last Will and Testament – A will lets you dictate where your belongings and real estate go and appoint someone or a company you trust to execute your wishes after your passing.

2. Advanced Directives for a Natural Death (“Living Will”) — A living will is your declaration for a desire for a natural death under certain circumstances. This document allows you to decide whether you want to permit the use of extraordinary means to support life function (including artificial hydration and nutrition). This document is crucial for your family members because it takes the pressure off them having to decide when it is time to end the good fight.

3. Health Care Power of Attorney — This document appoints someone else as your health care agent to make decisions with your treating physicians any time you’re unable to cooperate in a meaningful way in your own health care (i.e. in the event of stroke, brain injury, temporary or permanent mental impairment due to disease or medication, etc.). 

4. Durable Power of Attorney — This document can be as broad or limited as you want. It appoints another to act on your behalf to sell or buy property, pay your bills, act in your stead for court proceedings, make gifts, pay your taxes, etc. You can make this specific to one instance, have the document come into event in the event of your incapacity, or make it as broad as being into effect immediately with all the powers. This document also avoids expensive court proceedings for guardianship in case of your mental incompetency. 

The complexity of your life plan will depend on the complexity of your assets and needs. Research the best insurance plans and rates to ensure you and your loved ones are adequately protected when tough times arise. Consult with your attorney to discuss the four basic estate planning documents and any trusts you may need. Finally, seek the assistance of your tax advisor to determine the best plan for you and your family. 

Did you enjoy this article? Check out Parenting At Home for more informative articles and excellent resources designed to give parents a helping hand.

Photo Credit: Pexels

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