Estate planning is something you don't need to think about until you are approaching the end of your life, right? Wrong. Ask any financial expert out there and he or she will tell you that it is never too early to create an estate plan, especially if you are a parent. Here are three of the biggest reasons why:
1. An estate plan allows you to name guardians for your children in the event of a tragedy.
Yes, chances are that you will not be passing away anytime soon, and you will be here to see your children become adults. But on the off-chance that tragedy does strike, don't you want to have a plan in place? Often, especially in young, healthy adults, death comes without warning.
You can create a will that dictates exactly who should have guardianship of your children in the event that you and their other parent pass away or become incapacitated. Without a will, a court will decide who should have guardianship of your children, and it might not be the person you would choose.
While the law in Mississippi does not allow a parent to "will" a child to another person if there is a fit natural parent who remains living, a testamentary guardian can be chosen to handle the estate you leave your child. This is especially important if the child's other parent is not financially responsible.
In the event that your child's other parent is not present, is unfit, or is deceased, you need to choose the person or persons who will properly care for your child. Married couples can choose their child's guardian in the event that both parents die at once, as in a car wreck or other tragic accident.
Mississippi has a long-standing "urban legend" that a parent can choose a "godparent" for a child and theat being a godparent carried legal rights. It does not. Your child may certainly have a godmother or godfather. This designation has no legal weight. Planning your estate, including guardians for your children, is the only way to protect your children in the event of your death.
2. With an estate plan, you can make sure your children are provided for, financially speaking.
While your will states who should care for your children, you will also want to make sure that your children are provided for financially. One way to do this is by purchasing life insurance, which can make sure that your children are supported if you or the other parent should pass away suddenly. A benefit of purchasing life insurance when you are young and healthy is that the rates are much less expensive.
In addition to purchasing life insurance, you will also want to make sure that you have named your children as beneficiaries for your retirement accounts such as IRAs or 401(k)s. This not only makes sure that the funds go to your children, but also allows the funds to skip probate, which is a long and expensive court process.
3. Having an estate plan in place gives you peace of mind that you can't put a price tag on.
No one likes to think about death, especially parents of young children. But working with an experienced attorney to get an estate plan in place gives you peace of mind that is truly priceless. The next time you and your spouse are out to dinner or taking a trip just the two of you, you can relax knowing that your precious children will be taken care of no matter what.