There are many reasons to set up an estate plan. It can help you reduce the tax burden of the estate, it can give you more say in how your money is used and it can help you leave specific assets to specific people — just to name a few benefits.
However, two of the main things you want to think about are protecting your children and preventing conflict between family members. An estate plan helps you do both.
Your estate plan may need to include a guardianship designation. If your children are minors or you have adult children with special needs, you must choose someone to care for them in the event that you are no longer around to do so. Picking a guardian gives you peace of mind.
It also heads off potential conflicts. Without your directive in place, you can imagine how the situation could potentially play out:
- Your family has no idea who should take the children.
- The sibling whom you’re closest to wants to rear them.
- Your parents insist that they should be the ones to care for the kids.
- There are problems on both sides: Your sibling has fewer financial resources to take on your kids, while your parents’ age makes them less than ideal candidates.
If they do not know what you really wanted, they can fight for months or even years over the custody of the kids. This is not ideal for anyone — least of all for your children. An estate plan helps you avoid the whole thing.
As you can see, estate planning is about more than just assets. Make sure you know what steps you need to take.