You made sure your kids wore helmets, ate their vegetables, and looked both ways before crossing the street when they were small. Why? Because you worried about their safety. Protecting your children financially is no less important. Rather than leaving them to figure out a plan for finances and medical care in the event of your death or incapacitation, you can create a living Will, a traditional Will, a health care proxy, and designate beneficiaries. Taking these significant estate planning steps can help ease the burden on your loved ones.
Create a Will
A Will allows you to leave specific assets to designated loved ones, and name a guardian for your children if they are not of legal age. Creating a Will is easy, and makes your wishes legally binding, and is an important step in preparing your legacy for your loved ones. Wills can help limit arguments among siblings, as big-ticket items like houses, cars, and jewelry, as well as objects of sentimental value are clearly bequeathed to one person.
Name Beneficiaries to Retirement Accounts
You can name a beneficiary for your 401(k), 403(b), IRA, and HSA in the event of your death. You can designate children as the beneficiaries even if you have a spouse, and these designations can supersede Wills.
Designate a Heath Care Proxy
A health care proxy, also known as medical power of attorney, is a document that identifies an individual to make decisions for you if you are unable. If there is a medical emergency and you are without one, even your spouse or children won’t have legal authority to make medical decisions for you. Parents can also remind their children to create a health care proxy for themselves once they turn 18, otherwise even as their parent, you will not be able to make medical decisions for them.
Create a Living Will
An advance medical directive, or living will, allows you to state your wishes regarding issues such as life support and organ donation in case of an emergency. If you don’t have a living will, family members may not know what to do regarding your health care and argue over serious issues.
A living Will, traditional Will, health care proxy, and designated beneficiaries become very important in the cases of death and emergencies, when family members will probably feel least able to make important decisions because of grief and stress. Securing your child’s future after your death and taking steps to relieve their stress if you become very ill are important parts of being a good parent.
Planning ahead of time can help you avoid major problems in the future. At O’Donnell Financial Group, we will help you look to the future and plan for all aspects of retirement including significant estate planning steps. Click here to schedule your complimentary, no obligation review today.