Parents have a lot things to think about, but they can’t let the plethora of responsibilities and thoughts stop them from planning for their child’s future. One of the most important things they can do for this is to set up a plan for what will happen if both parents pass away.
If one parent passes away, the child will be cared for by the parent who is still living. If neither parent is living, the court will have to determine who the children should live with unless there are already plans made by the parents.
Part of the plan you need to establish is a guardianship designation. This names the person you want to care for your child. You should choose someone who is physically, emotionally and financially able to handle the responsibility. You can set up some financial help for them through your estate plan.
In your estate plan, you can use your will and any trusts you establish to provide money for raising the child. If you opt to do this, think carefully about how you will ensure that the money is used appropriately. You may need to name a trustee for the financial matters to provide a system of checks and balances.
Another option you have is setting up payable on death (POD) designations on all your financial accounts. This can provide assets for the guardian quickly, so make sure you keep these up-to-date. The accounts that have this designation don’t need to be covered in the estate plan.
Ultimately, the terms of your estate plan can help to make life a bit easier for your child and the person who raises them if you’re not around.