As young professionals get married, have children, buy a house, and perhaps grow a business, not many people in their 30s and 40s have “estate planning” near the top of the to-do list. Unfortunately, tragedies happen. Preparing for the worst isn’t easy to think about, but here are four critical things you can do to protect your family.
- Make sure you have adequate life insurance in place. When a tragedy strikes, not only do you lose your loved one, you also lose their income and/or their support for you to earn an income. Make sure your life insurance has a death benefit that is adequate and affordable.
- Ten years of income replacement (wages x 10) is a good place to start for death benefit amount. Fixed-term insurance is generally the most affordable.
- Get a fixed rate for 20 or 30 years if you have a growing family, own a business, or have debt to manage.
- If a spouse is not earning income, get at least half of the death benefit of the earning spouse, if not the same amount. The support a stay-at-home spouse provides is priceless!
- Have a Last Will and Testament in place. If there was an accident, who would become guardian of your children? Having a Will ensures that you make that decision. Name the people you trust, who you think will be best for your kids, and have agreed to take on this responsibility.
- Make sure beneficiaries are current. We often begin accumulating assets before starting a family. In some cases, people forget to update beneficiaries to their new spouse or children. If assets aren’t titled properly, or beneficiaries aren’t updated, your assets may go to someone other than your immediate family and that can cause problems.
- Name a Healthcare Power of Attorney (POA) for your kids. Do you travel and leave the kids with family? How will those caretakers handle necessary medical care if they are not given adequate permission? A Healthcare Power of Attorney can be a vital document to grant permission to your children’s caretakers should an emergency arise.
We are here to discuss these issues and any others that may impact your personal situation. Hopefully we can help your family make the best of difficult situations by being prepared for the unexpected. If you need to take care of any of the above, let’s talk.