The Novice’s Guide to Life Planning: How to Preserve Your Children’s Future

No matter what age you become a parent, you may not have given much thought to life planning before having children. However, when kids enter the picture, preserving their future becomes a major priority. Still, most parents aren’t all that knowledgeable on what life planning entails; the important legal documents to get in order, and the other steps they can take to preserve their children’s future. If this sounds like you, this novice’s guide to life planning outlines exactly what you need to know to get started.

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Life and Disability Insurance

Life and disability insurance are never more crucial than when you become a parent. Raising children is costly, and should you become disabled and unable to work, disability insurance is a lifeline that makes it possible to continue providing for your family’s needs. Additionally, a good life insurance policy is a safeguard that provides a financial means to ensure that your children are cared for, should an accident or illness take your life before they reach adulthood.

Advance Directives

Few things are more devastating than having to make the decision of whether to continue life support for a parent or other family member who has suffered serious injury. To spare your children from having to make such difficult decisions, parents should prepare advance directives that specify precisely what heroic measures you wish to receive under varying medical conditions, such as a persistent vegetative state or irreversible coma. Specifically, advance directives serve to communicate your wishes regarding treatment in circumstances in which you’re no longer able to communicate.

Last Will and Testament

Advance directives are also called living wills, not to be confused with a traditional will, or Last Will and Testament. Your “last will” outlines who will inherit your property and other assets after your death, can designate guardians for minor children, and designate financial guardians to oversee financial assets to be used in providing care for your children until they reach a specified age. Both living wills and last wills are essential legal planning documents for parents.

Deeds and Trusts

Deeds and trusts are other legal and financial measures designed to streamline the transfer of property and other assets from you to your children, following your death. Inheritance outlined in wills must almost always go through a process known as probate, a time-consuming and expensive legal process that can hold up the transfer of assets following a person’s death. As such, more families are opting for tools like Quitclaim deeds and irrevocable living trusts to facilitate the transfer of property and the oversight of finances for the benefit of their children, both in the case of inheritance and other instances, as well.

Retirement and College Savings

Personal finance experts suggest having multiple savings accounts for your various financial goals, such as separate accounts for retirement savings and savings for your children’s college education. There are a variety of tools and account types that can be used for either purpose, ranging from 529 College Savings Plans for college savings to the traditional 401(k) and IRA for retirement savings.

While there’s no one right answer for every family, you should take the time to evaluate your finances, weigh your options, and set up a savings plan that builds a nest egg for retirement and start saving for your children’s college education early.

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In Summary

It’s far too easy to neglect saving when faced with the day-to-day costs of raising children, so make savings a priority to build a strong financial foundation. Likewise, young parents may not consider the potentially devastating consequences of unforeseen illness or a tragic accident and the financial ramifications these events could have on their children’s futures. Even if you’re a life planning novice, implementing these essential steps will give you peace of mind in knowing that you’ve protected your children’s future to the best of your ability.

by,  Jackie Waters ,    Fred Coon, CEO

 

Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200

 

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